Consumers rediscovered their appetite for spending in May as retail figures grew at their fastest rate for two years.
Sales figures gathered by the Confederation of British Industry (CBI) showed that sales were up for 65 per cent of retail businesses and down for only 14 per cent. That positive balance of 51 per cent compares with just 30 per cent in April and is the biggest growth in sales since April 2002.
The figures suggest an underlying trend that sales are continuing to pick up, with sales now level with the last quarterly statistics in February and at the highest since June 2002. CBI experts expect sales in June to be similarly strong.
May’s warm weather and retailers’ willingness to draw in consumers with special offers are among the reasons suggested for the upturn in sales, but all retail sectors except confectionery, tobacco and news reported better figures than a year ago.
Footwear and leisure was the strongest growing sector, while sellers of groceries and durable household goods, such as TVs, DVD players and fridges, also reported big jumps in sales.
John Longworth, chairman of the panel that collects the CBI’s retail figures, said: “Strong consumer spending is fuelling the economy and this survey shows it is gathering momentum.
“Price promotions and warmer weather have contributed but rising take-home pay, low unemployment and a strong housing market are the key drivers’ of consumers’ willingness to spend.”
However, Longworth said the increased sales had come at a price and that business owners wouldn’t necessarily be feeling the benefit of the pick-up in spending.
“Competition is strong and retailers have only been able to increase prices slightly. With profit margins squeezed, retailers have edged back investment plans and sharply cut jobs,” he said.
