High-Street sales growth remains subdued
- Published on Tuesday, 24 May 2011 14:15
- Posted by Scott Buckler
Annual sales volumes growth on the high street remained subdued in May and retailers expect a similar pace of growth next month, the CBI said today (May 24th)
The CBI’s latest quarterly Distributive Trades survey found that 41% of retailers saw the volume of sales rise in the two weeks to May 16th, while 23% said they fell, compared with a year ago. The resulting balance of +18% was above expectations that sales would be flat (-1%), but broadly in line with more muted sales growth since February.
Price inflation on the high-street remained rapid in May, with 71% of retailers saying that average selling prices rose on a year ago, and 8% saying they fell, giving a balance of +63%. Prices are expected to rise at a similar pace in June (+62%).
Continued subdued sales growth resulted in an increase the quantity of stocks relative to expected demand this month (+31%), the highest since November 1984 (+33%). Retailers expect stocks to remain at high levels in June (+25%).
The volume of sales growth for the time of year was better than expected, -2% compared to the -18% predicted last month, possibly due to the positive knock-on effect of the Royal Wedding weekend. There was some modest growth in orders volumes in May on a year ago (+6%) against expectations of a slight fall (-4%). However, orders are expected to stagnate next month (-2%).
Looking forward, retailers expect growth to continue at a similar subdued pace next month, with 35% predicting sales will rise and 21% saying they will decline, giving a balance of +14%.
Retailers expect investment to be stable over the next twelve months (-2% compared to +14% in February). This mirrored the sentiment about the business situation over the next three months, which is broadly neutral (-2%).