After a decline, UK retailers expect sales to stabilize in June on improving consumer sentiment, survey data from the Confederation of British Industry showed on Thursday. The retail sales balance fell to -10 percent in May from +5 percent in April, the Distributive Trades Survey showed. However, retailers expect sales to stabilize next month.
Around 18 percent of retailers reported disappointing sales for the time of year. However, only a net 9 percent expected sales to fall short of seasonal norms to a lesser extent next month.
The survey showed that price growth remained near multi-decade highs in May. The corresponding balance came in at 77 percent compared to 80 percent in February. About 76 percent said prices will increase again in June.
Retailers reported that headcount in the year to May declined at the quickest rate since February 2009. Moreover, a net 49 percent said headcount will contract next month.
Investment intentions also deteriorated at the greatest extent since May 2020 but retailers forecast a moderate improvement in their business situation for the first time since November 2021.
Amid challenging trading environment and formidable inflationary pressures, retailers had to cut back on the size of their workforce and investment plans, CBI Principal Economist Martin Sartorius said.
Looking ahead, there are some reasons for retailers to be more optimistic about the outlook, Sartorius said. The increase in income after the fall in households' energy bills in July is likely to lift retail sales in the second half of the year.
