Retailers reported average sales for the time of year in May, but expect them to dip below seasonal norms again next month, according to the CBI’s latest quarterly Distributive Trades Survey. Year-on-year selling prices continued to grow at a similarly rapid pace to February, though retailers expect price growth to ease slightly in the coming quarter.
Sentiment in the retail sector deteriorated at its quickest pace since November 2020. Investment intentions for the year ahead stand at their weakest level since the early stages of the COVID-19 pandemic in May 2020.
The key survey findings included:
- Retail sales were average for the time of year in May
- Year-on-year retail sales were broadly flat
- Retailers expect their business situation to deteriorate in the next three months
- Retailers anticipate less capital spending in the next 12 months
- Average selling prices grew at a similarly rapid pace to February
- Stock volumes in relation to expected demand rose
- Internet sales volumes in the year to May fell at the quickest rate on record
This survey included 126 companies, including 56 retailers.
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.”
