British retailers continued to report weak sales activity in May as consumer demand remained under pressure, although the downturn was less severe than the record decline seen a month earlier, according to figures released by the Confederation of British Industry on Tuesday.
The CBI’s monthly retail sales balance improved to -46 in May from -68 in April.
April’s figure marked the lowest reading since the survey began in 1983.
The retail sales balance measures the difference between the percentage of firms reporting an increase in sales volumes and those reporting a decline compared with the same month a year earlier.
The latest survey also showed that retailers expect conditions to remain difficult in the coming months, despite a modest improvement in expectations for June.
Retailers remain pessimistic on the outlook
Expected sales for June improved to -36 from the -60 reading previously forecast for May.
However, sales for the time of year weakened further, slipping to -35 from -32 in April.
The latest figure marked the weakest seasonal sales assessment since June 2025.
Charlotte Dendy, economic surveys manager at the CBI, said retailers remained pessimistic after a prolonged period of weak consumer sentiment.
“With sentiment among retailers negative for two years now, businesses expect to cut back further on investment, while continuing to reduce headcount,” Dendy said.
The findings point to ongoing pressure across the retail sector, with firms continuing to grapple with subdued consumer spending and rising economic uncertainty.
Official data paints a mixed picture
The weak CBI survey contrasts with official retail sales figures released last week, which showed a more stable trend in consumer spending.
Official data for April showed that retail sales volumes excluding fuel were 1.1% higher compared with the same period a year earlier.
Sales volumes were also unchanged on a monthly basis.
The official figures cover a broader range of retailers than the CBI survey, which focuses on responses from businesses within the sector.
Despite the mixed signals, businesses remain concerned about the broader economic environment and its potential impact on household spending.
Energy price concerns weigh on businesses
Retailers are increasingly worried that higher energy prices linked to the Iran war could place further pressure on consumers’ disposable incomes while simultaneously increasing operating costs for businesses.
Consumer confidence has also remained fragile. Britain’s longest-running consumer sentiment survey, conducted by GfK, fell to its lowest level since October 2023 in April and recorded only a slight recovery in May.
The CBI survey additionally found that retailers raised prices at the slowest pace since February 2025, which the organisation attributed to weak demand conditions.
Bank of England monitoring inflation risks
The Bank of England is closely monitoring pricing trends and business profit margins as policymakers assess whether interest rates may need to rise later this year to contain inflationary pressures linked to the Iran war.
Earlier on Tuesday, Kingfisher, the European home improvement retailer that owns B&Q and Screwfix in the UK, along with Castorama and Brico Depot in France, reported a 0.7% decline in first-quarter sales.
Despite the fall in sales, the company maintained its full-year profit guidance, signalling cautious confidence in its broader outlook despite ongoing weakness in consumer demand.
The post UK retailers remain cautious despite improvement in May sales balance appeared first on Invezz
