UK retail sales average in May; might dip below seasonal norms in June

Year-on-year retail sales were broadly flat (-1 per cent from -35 per cent in April) and are expected to fall at a modest pace next month (-4 per cent).

Retailers expect their business situation to deteriorate in the next three months (-13 per cent), marking the quickest fall in sentiment since November 2020. They also anticipate less capital spending in the next 12 months compared to the past 12 (-34 per cent) – the weakest investment intentions since May 2020, the survey report said.

Average selling prices grew at a rapid pace to February (+77 per cent from +75 per cent), though retailers expect price growth to ease somewhat next quarter (+69 per cent).

Stock volumes in relation to expected demand rose above adequate in May (+11 per cent from -9 per cent), with a further rise expected next month (+16 per cent).

Internet sales volumes in the year to May fell at the quickest rate on record (-59 per cent – question first asked in August 2009). The rate of decline is expected to ease next month (-54 per cent), although this remains rapid in historical terms, according to the report.

Martin Sartorius, principal economist at the CBI, said: “Despite retail sales returning to their average for the time of year in May, the outlook for the sector has worsened due to high inflation and broader economic uncertainty. As a result, retailers are reining in their investment plans for the year ahead to the greatest extent since May 2020. Government action to ensure the economic security of the poorest households and support the investment ambitions of retailers will be crucial to ensure the longer-term prosperity of the UK economy and society.”

This survey included 126 companies, including 56 retailers.

Fibre2Fashion News Desk (KD)