UK retail sales pick up in May
Modest growth in CBI survey
June 4 2003
UK retail sales grew in may for the second consecutive month, according to the CBI.
While retailers have seen an improvement, sales growth is modest compared with last year, according to the CBI’s latest Quarterly Distributive Trades survey.
Retail sales were higher in May than a year earlier, the second consecutive month of year-on-year growth, following a difficult start to 2003 when sales barely grew at all.
With 40 per cent of respondents reporting sales were up, while 26 per cent said they were down, the balance of plus 14 per cent compares with an average of minus one over the first three months of the year. Sales growth is also expected to be slightly stronger in June.
However, retailers are taking a cautious approach to decisions about capital investment. Alastair Eperon, chairman of the CBI’s Distributive Trades Panel and a director of Boots, said: “Spending over the past couple of months has been boosted by the good weather, low unemployment, the end of the Iraq conflict and the prospect of another rate cut. The underlying trend is creeping back up but it is still well down on the growth seen through most of 2002.
“Retailers expect some improvement in business conditions during the second half of the year but that is only relative to the weakness of their current situation. Nervousness about how sustainable the sales recovery will be has severely hit retailers’ willingness and ability to commit to investment.”
Sales were higher than last year in almost every retail sector. Shops selling footwear and leather goods saw the strongest growth, followed by grocers. The biggest year-on-year rates of decline were among furniture and carpet retailers and chemists.
