RETAIL sales recorded their harshest annual drop in 16 months in May, according to a closely-watched business survey published yesterday.
While the UK’s retailers remain hopeful that sales will pick up in June, May’s disappointing result is a stark reminder of the troubles facing the country’s stores.
The Confederation of British Industry (CBI), which compiles the data, found that 33 per cent of retailers reported that this month’s sales were lower than in May 2012, while just 23 per cent said that sales were higher than a year ago.
The resulting negative balance of minus 11 per cent – using the exact figures rather than rounded data – was the worst result uncovered by the CBI’s survey since January 2012, when it was at minus 22 per cent.
Meanwhile the three-monthly measure of sales volumes, designed to iron out monthly fluctuations, also worsened – moving from a balance of minus four in April to minus six in May.
Adding to the bleak outlook, orders placed on suppliers fell at the fastest pace since November 2011. This sub-index plummeted from a balance of minus 12 in April to minus 25 in May.
Yet retailers expect the situation to brighten in June, with a positive balance of 10 per cent of respondents suggesting that sales will be higher than in June last year.
“Retail sales growth has weakened since the start of the year as households continue to feel the pinch, with wages failing to keep pace with the cost of living,” said Asda’s Barry Williams, who chairs the panel for the CBI survey.