Retail sales down but wholesale up
Published:  28 May, 2010

LONDON: UK retails sales tumbled in May with the weakest outlook since March last year but wholesale volumes continued to grow according to the CBI's latest distributive trades survey.

It found that 48% of all retailers surveyed reported a drop in sales volumes in the first two weeks of May relative to the same period the year before. But 41% of wholesalers said that sales rose, while 22% said they fell, giving a rounded balance of +20%. This was was not quite as strong as expected (+42%) but wholesalers predict volumes next month will be broadly unchanged on last year (a balance of +3%).

The mood of retailers is gloomy, with a balance of 15% more expecting sales volumes to fall rather than rise. In April, a balance of 17% more retailers thought sales would rise rather than fall.

Ian McCafferty, CBI chief economic adviser, said: "These retail sales figures for the early part of May are clearly disappointing, with many sectors failing to achieve higher sales than a year ago," said

Mr McCafferty said that unseasonably poor weather at the beginning of the month could have been responsible in part for the poor outcome for clothing sales, while the slowdown in house prices may have dragged down enthusiasm for big-ticket items.

"Retail conditions look to remain fragile, however, as another year-on-year fall in sales is expected in June," he said.

Economists said that the latest CBI distributive trades survey results highlighted concerns that economic recovery remains fragile.

The survey was conducted between 27 April and 12 May.

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