High Street prices on the increase
Retailers put up their prices in May at the fastest rate for 16 years, the CBI has reported. The CBI’s latest distributive trades survey revealed that retailers, faced with rising energy, food and raw material prices, were passing on the additional costs to customers. A balance of 56 per cent of firms said that average selling prices had increased, the biggest majority since May 1992. A similar rate of price rises is expected next month, the CBI said. There was slightly better news on sales. Some 28 per cent of retailers said that year-on-year sales volumes had increased, while 42 per cent said they had fallen. The resulting balance of minus 14 per cent was in line with expectations and was less challenging than the minus 26 per cent reported last month. Sales are expected to recover slightly in June, up by a predicted balance of 6 per cent. Grocers, including major supermarkets, had a good month in May, with a balance of plus 51 per cent enjoying year-on-year growth. But shops selling large items, such as household goods and furniture, experienced falls in sales volumes compared with a year ago. Ian McCafferty, the CBI’s chief economic adviser, said: “The high street has faced another testing month as consumer spending power has been hit by the rising cost of fuel and food, as well as any credit crunch worries. “It is encouraging that retailers can see some recovery in sales next month, but they are not optimistic about the business outlook, and retail conditions are likely to remain tough.” Date:30 May 2008
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