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Annual sales volume growth on the high street remained subdued in May with retailers expecting a similar pace of growth next month, according to the Confederation of British Industry (CBI).

The CBI’s latest quarterly Distributive Trades survey finds that 41 per cent of retailers saw the volume of sales rise in the two weeks to May 16th, while 23 per cent say they fell, compared with a year ago.

The resulting balance of +18 per cent was above expectations that sales would be flat, but broadly in line with more muted sales growth since February.

Price inflation on the high-street remained rapid in May, with 71 per cent of retailers saying that average selling prices rose on a year ago, and 8 per cent saying they fell, giving a balance of +63 per cent. Prices are expected to rise at a similar pace in June (+62 per cent).

The wholesaling sector shrugged off a slowing in sales growth last month, with a balance of +35 per cent reporting that sales volumes are up on a year ago in May, compared to +13 per cent in April.

CBI Director-General John Cridland says, ‘High-street sales growth is subdued and is likely to remain sluggish for some time. Household budgets are being persistently squeezed by the gap between price inflation and weak wage growth.

‘Given these challenging consumer conditions, it is good news that retail sales growth is stable, not falling.”

Chair of the CBI Distributive Trades Judith McKenna says that the improvement in family spending power is not likely to experience an improvement any time soon.

‘Consumers will be focusing on getting value for every one of their hard-earned pounds, so it’s crucial that retailers make their prices as competitive as possible,’ McKenna says.

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