UK retail sales volumes witnessed a modest growth of 8% in May 2024 from a 44% decline in April, according to the Confederation of British Industry (CBI) Distributive Trades Survey.
This is the fast growth since December 2022, but retailers still expect sales to drop moderately in June by around 4%.
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During May, retail sales were deemed “average” for the time of year with a growth of 2% marking the strongest performance in eight months.
Expectations for June suggest sales will continue to align with seasonal norms.
Orders placed with suppliers saw a moderate year-on-year decrease at 11% from a 49% drop in April, and retailers predict a slightly steeper reduction in orders in June.
The rate of selling price inflation has significantly decreased to 20% from 54% in February, reaching its lowest point since August 2020.
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By GlobalDataA marginal acceleration in price increases is forecast for June 2024.
Employment in the retail sector declined by 26% in May – the seventh consecutive monthly fall.
CBI lead economist Alpesh Paleja said: “Falling inflation and continuing real wage growth will contribute to a healthier consumer outlook, in turn supporting the retail sector further.
“That being said, retailers are restrained about their business situation over the coming quarter. Headline sales are expected to fall moderately next month, and it’s concerning that retailers’ investment intentions have deteriorated noticeably.
“The mixed mood from our survey demonstrates just how nascent the economic recovery is. All parties should use this general election campaign to embrace policies which will embed sustainable growth, foster the investment we need to develop a labour market which delivers higher living standards, and accelerate our transition to net zero.”
The latest Distributive Trades Survey, conducted between 26 April and 15 May 2024, included responses from 56 retailers out of 137 businesses surveyed.
In May, the British Retail Consortium (BRC) reported UK retail sales decreased 4% year-on-year in April.
