Retail sales volumes rose strongly in May compared to a year ago, research finds.

Retail sales volumes rose strongly in May compared to a year ago, research finds.

While business sentiment may have improved, sales were still reported to be below average for the time of year, according to findings from the Confederation of British Industry’s latest quarterly Distributive Trades Survey.

Some 43 per cent of retailers report an increase in their volume of sales compared to a year ago, and 23 per cent say they have seen a fall. The resulting rounded balance of +21 per cent is broadly in line with expectations (+19 per cent).

Sentiment regarding the business situation for the next three months has also turned positive (+3 per cent) for the first time since November 2011 (+11 per cent).

However, retailers reported that sales were below average for the time of the year (-19 per cent). Despite the increase in sales volumes, stock levels rose unexpectedly relative to expected demand (+23 per cent, compared with an expectation of +3 per cent).

The majority of retail sectors saw sales increase, notably grocers (+40 per cent), non-specialised (including department stores) (+65 per cent) and furniture and carpets (+72 per cent).

Looking ahead, retailers expect sales volumes to grow again on a year ago in June (+25 per cent) and the business situation to be stable over the next three months (+3 per cent), following expectations of a modest deterioration in recent quarters.

Judith McKenna, chair of the CBI Distributive Trades Panel says, ‘It’s encouraging to see high street sales up compared to a year ago, and that business sentiment about the next three months has improved.

‘However, sales are still below the average for the time of year and the combination of high unemployment, slow wage growth and weak consumer confidence means that the retail sector is likely to remain under pressure in the short term.’

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