Better weather prompts retail rebound in May
SHOPPERS hit the high street in force this month after April’s washout, industry data showed yesterday, and retailers expect sales to remain strong through June.
Sales were higher this month than in May of last year according to 43 per cent of retailers, while just 23 per cent reported a fall – leaving a positive net balance of 20 per cent, according to the Confederation of British Industry’s (CBI) distributive trades survey.
Such strong sales represent a rebound from April, when a balance of six per cent reported sales were down on the year, and that is set to continue as a balance of 25 per cent see sales improving next month.
That healthy growth is helping the economy more widely – a net balance of 12 per cent of firms said they had increased the size of their workforce this month, and a balance of seven per cent expect to in June.
Grocers had a good month, with a balance of 40 per cent reporting rising sales, up from minus 19 per cent in April, while a net balance of 72 per cent of furniture and carpet stores and 49 per cent of clothes shops also reported an improvement.
However, despite the rebound in May, a net balance of 19 per cent of retailers said sales are still poor for the time of year, and economists warned consumers are still wary of splashing out.
“While this is welcome news, in that spending may help boost the economy in the second quarter, the consumer still seems an unlikely driver of the economic recovery this year given stubbornly high inflation, high unemployment and widespread anxiety about the general economic outlook,” said Markit economist Chris Williamson.
“Any increase in spending may well therefore prove only temporary.”