Retail sales expected to be ‘a little healthier’ next month

Retail sales are expected to pick up in May, according to the Distributive Trades Survey by the Confederation of British Industry (CBI).

The survey of 100 firms showed that, in the year to April, retail sales volumes were broadly unchanged. Sales were below average for the time of year for the second month in a row, but not as bad as the figures in the year to March.

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Meanwhile, orders placed on suppliers fell slightly, but are expected to pick up again in the year to May.

Within the retail sector, falls in sales volumes in the clothing, footwear and leather, non-store, and furniture and carpets sub-sectors were offset by sales growth among grocers, hardware and DIY, and recreational goods stores.

Looking ahead to May, retailers expect sales and orders with suppliers to grow at around average pace.

Year-on-year retail internet sales growth picked up in April after having risen at the slowest pace since 2009 in the year to March. Retailers expect a further acceleration in internet sales growth in the year to May.

Meanwhile, wholesalers saw a pick up in sales volumes growth in the year to April, while motor traders reported a fall in sales volumes (against expectations of continued growth).

Looking at economic growth more broadly momentum is expected to remain lacklustre through this year, with the economy growing at a similar pace to last year.

Anna Leach, CBI head of economic intelligence, said: “Sales have continued to disappoint in April, after falling in March. But expectations for next month are looking a little healthier.

“It’s no secret that UK high streets have endured tough trading conditions in recent months, with some big names closing or cutting back. Much of this reflects ongoing structural changes in the sector as well as the continued squeeze on households’ real incomes.”

She added: “While conditions have improved for households recently – with real wage growth inching into positive territory – we expect further gains in living standards to remain modest. So the pressure looks set to stay on retailers for the time being.”

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