Retail sales fall in May as pain worsens
SHOPPERS are belt-tightening again, according to data released yesterday which shows that high street sales fell by more than expected in May.
New figures from employers’ organisation the CBI showed that some 17 per cent more retailers reported a fall, rather than a rise, in sales during May. The data suggests that April’s rise, which saw a positive three per cent balance boosted by the timing of Easter, was little more than a temporary blip.
Meanwhile, the overall proportion of retailers saying that their business situation was deteriorating was at the lowest since November 2007. There was also evidence of slowing price pressures – with price rises at their most limited since early 2007.
“Trading conditions are expected to remain difficult in June,” said Andy Clarke, chief operating officer of Asda and chairman of the survey panel.
But excluding April’s results, May still saw the best result for retailers in nearly a year, and economists said this provided further evidence of the easing of the recession.
“Retailers are less pessimistic about their general business situation, and the decline in demand now appears to be slowing compared with the turn of the year. However, with unemployment still rising, conditions will remain tough,” said the CBI’s chief economic adviser Ian McCafferty.
“The trend in retail sales is becoming less weak than a few months ago. It is too early to talk of recovery, but the worst is probably past,” added Citigroup’s Michael Saunders.
Retail sales have remained fairly healthy throughout the recession, even as consumer spending on investments such as cars and houses has collapsed, and on services like restaurants and hotels has been hit hard.
Grocers and footwear sales are growing at a majority of retailers. While hardware, china and Do-It-Yourself sales have improved sharply in recent months, although durable household goods remain extremely weak.
Separately, data published today, indicating that consumer confidence held steady in May also suggests the worst of the downturn could be over.
According to market research firm GfK NOP’s consumer confidence index, confidence is -27, only slightly better than this time last year, but firm compared to April.
“The UK appears to be stoical about the continuing economic situation,” said Rachael Joy, spokeswoman for GfK.