Retail sales in May grew faster, year on year, than predicted, but retail employment continued its freefall, according to the latest report by the Confederation of British Industry (CBI).
The quarterly Distributive Trades Survey (DTS) found that more retailers questioned by the survey reported an increase in sale volumes (36%) than those that reported a drop (27%).
A balance of 9% is the most positive figure since the report in December 2004, increasing expectations for faster retail growth throughout the next month.
The latest report also suggested a positive difference between what retailers expected in May compared to what they experienced.
Although those questioned still believed that sales were low for the time of year, the balance of –7% was the least negative for 17 months.
Despite retailers seeing higher sales than expected, employment in the retail sector continued its two-year decline as retailers are forced to cut their prices to remain competitive.
The survey showed that retail employment fell at its fastest rate in the survey’s history, with 39% of retail employers reporting a fall in jobs compared to last year, while only 10% said the number of positions had risen.
Executive director of Asda and chairman of the CBI’s DTS Panel John Longworth, said: “Growth in sales volumes today is still a world away from the rate we were seeing just a few years ago and retailers are still facing fierce price competition and tighter profit margins. This pressure to discount coupled with the poor retail climate of the last year or so has forced retailers to lay off more staff.”
