Return to high street growth hopes dashed by CBI report

● Shops report flat April sales after weak March data ● But forecasts suggest May could see improvement

High street sales have continued to disappoint in April, dashing expectations for a return to growth according to a survey by business lobby group the CBI.

Its latest monthly distributive trades survey yesterday revealed that the volume of retail sales recorded was flat in the year to April, with sales coming in below average for the time of year for the second month in a row.

Howard Archer, chief economic advisor to the EY ITEM Club, described the latest figures as “disappointingly weak”.

Sales volumes in sectors including clothing, footwear and furniture & carpets all fell during the month but grocers, hardware & DIY and recreational goods stores saw strong gains in volumes.

Year-on-year internet sales growth also picked up in April after rising at the slowest rate since 2009 in March.

In total, 31 per cent of retailers said that sales volumes were up in April on a year ago, whilst 33 per cent said they were down, giving a balance of -2 per cent. However 33 per cent of respondents expect sales volumes to increase in May on a year ago with 8 per cent expecting a decrease, giving a strong positive balance of +25 per cent.

Anna Leach, the CBI’S head of economic intelligence, said overall expectations for next month are looking a ”little healthier” helped by factors including real wage growth inching into positive territory.

“It’s no secret that UK high streets have endured tough trading conditions in recent months, with some big names closing or cutting back. Much of this reflects ongoing structural changes in the sector as well as the continued squeeze on households’ real incomes,” she said.

“While conditions have improved for households recently we expect further gains in living standards to remain modest. So the pressure looks set to stay on retailers for the time being.”

Archer said the fact retailers are more upbeat about sales prospects for May was the only relatively bright spot in the survey.

“However, it is notable that their improved expectations for April seemingly failed to materialise. Consumers are still under significant pressure and it looks unrealistic to expect a marked upturn in consumer spending any time soon,” he added.

The CBI’S expect momentum in the UK economy to remain subdued through this year, with GDP expected to grow at a rate of 1.5 per cent and fall to 1.3 per cent in 2019.