views

UK retail sales plunge in May

UK High Street sales fell to a 14-month low in May, casting a shadow over the fragile recovery on the high street.

The CBI’s monthly distributive trade report said poor weather and a slowdown in the housing market had driven down consumer demand.

Pay squeezes and job insecurity also contributed to the drop.

The business group’s gloomy survey showed a sales balance of -18 in May from +13 in April.

The figures are based on a poll of retailers.

Badly hit businesses included chemists and DIY outlets, while clothing sales were also down after three months of continuous growth.

CBI chief economic adviser Ian McCafferty said: “These retail sales figures for the early part of May are clearly disappointing.

“The slowing momentum in the housing market may have been behind renewed weakness in sales of big-ticket items and other household goods.”

The CBI’s figures laid bare the problems on the high street and the figures were worse than many analysts had expected.

Meanwhile retailers are also negative about next month, with a balance of -15, indicating that another drop in the volume of sales is expected.

But the poll suggested that prices for high street goods were on the rise.

Howard Archer, chief UK economist at IHS Global Insight, said: “The CBI survey reinforces our long-held concern that the upside for consumer spending, and hence growth, will be limited for some time to come as households still face very challenging conditions.”

McCafferty added: “Unseasonal poor weather at the start of the month is likely to have dented clothing sales.”