Nervous retailers boosted as sales volumes helped by start of summer

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Sales were boosted by the start of summer, the CBI said (Source: Getty)

The start of summer delivered a “modest” boost for British retailers as sales growth picked up pace in the year to June, according to a survey of the industry.

The volume of sales grew faster than expected in the year to June to deliver a positive balance of 12 per cent of retailers reporting an increase, according to the Confederation of British Industry (CBI).

That represents a rebound from the two per cent balance reported in May in volatile data. Sales had earlier peaked in April (in part because of the late timing of Easter), with 36 per cent reporting higher sales volumes.

However, prospects for the coming year have declined further, with a balance of only three per cent of firms expecting higher sales in the next month, the lowest level since last September.

Retailers are starting to feel the squeeze from rising inflation, with many forced to choose between raising prices themselves or absorbing the higher cost of imports.

Consumer price index inflation reached 2.9 per cent in May, with most forecasters seeing little prospect of wage growth keeping up.

Anna Leach, CBI head of economic intelligence, said: “The start of summer has seen shoppers hit the high street, lifting sales – if only modestly.

“However, there’s no getting away from the fact that life is getting tougher, with retailers clearly cautious over the near-term outlook.”

Internet sales offered the brightest spot for retailers, with a balance of 46 per cent of firms seeing increased volumes. Some 41 per cent expect increased sales next month.

Vehicle sales also turned positive again in the year to June, after the first fall in sales for three-and-a-half-years in May.

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