Retail sales are surging ahead as falling prices and a boost to consumer spending power is giving retailers the most upbeat outlook for almost three decades.
The latest survey from the CBI showed 60 per cent of retailers saw sales rise in the year to May, with just 9 per cent reporting a fall, giving a balance of 51 per cent – far greater than expected and the strongest reading since the Christmas sales boost in December last year.
The poll also revealed a balance of 58 per cent of retailers expect sales to rise again in the year to June, which is the best reading for 27 years.
Rain Newton-Smith, CBI director of economics, said: “Retailers will be encouraged to see growth in sales and orders on the high street bounding ahead. Low inflation, which we expect to remain below 1 per cent for the rest of the year, has given household incomes a much-needed boost and greater spending power.”
The CBI figures come after official data last week showed warm weather and lower prices helped sales volumes jump 1.2 per cent last month, recovering from a surprise 0.7 per cent fall in March. Howard Archer, chief UK and European economist at IHS Global Insight, said: “The prospects for retail sales and consumer spending look largely bright. Consumer confidence is elevated, employment is high and rising, inflation is negligible and earnings growth is improving.”