UK retail sees boost in sales

Figures show a greater-than-expected improvement in sales figures.

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By :  ,  Financial Analyst

British retailers are seeing a greater-than-expected boost in sales. That's according to the latest survey from the Confederation of British Industry (CBI). The research found that 60 per cent of retailers saw sales rise in the year to May, while only nine per cent saw a fall.

That gives a balance of 51 per cent – the strongest reading since December when Christmas shopping led to increased sales.

Experts say that April's warm weather and low prices helped improve the sales numbers and the CBI says that the buoyant conditions on the high street are continuing – although this month's weather has been less predictable. Consumer finances have also been boosted by falling prices. The UK is now experiencing deflation for the first time since 1960 and there has also been a pick-up in real wage growth.

CBI director of economics, Rain Newton-Smith, explained: "Retailers will be encouraged to see growth in sales and orders on the high street bounding ahead."

She added that inflation is expected to remain below one per cent for the rest of the year – and it "has given household incomes a much-needed boost and greater spending power".

Growth reached a record high for recreational goods like games and sporting equipment and department stores also saw strong sales growth. However, hardware and DIY businesses saw a fall in sales volumes compared to a year ago. That indicated a balance of minus 67 per cent.

Positive outlook

The poll also indicated that retailers are expecting good things for the months ahead. The survey of 134 businesses found a balance of 58 per cent are expecting to see another rise in sales during the year to June – that's the best result for 27 years.

"Overall, the outlook is bright for firms on the high street, but challenges still remain, especially for food retailers, who are still feeling the heat of stiff price competitions from new entrants to the sector," Ms Newton-Smith said.

Recent figures from the Office for National Statistics also indicated improvement in the retail sector. Its survey found that UK retail sales rose by 1.2 per cent in April – the strongest increase since November.

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