A study found that retail sales volumes have declined this month compared to the same period last year, while employment levels have fallen sharply.
Volumes fell to -10 percent in the sentiment survey published by the CBI, which registered a growth of 5 percent in the previous month.
Retailers also said their headcount fell at the fastest pace since February 2009 and in the aftermath of the financial crisis. The survey by the employers’ group is the latest to show that weak sales and more than a year of rising costs have warn retailers against hiring.
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The survey of 123 respondents, 46 of whom were retailers, asked business leaders whether their company’s performance according to a certain metric had increased or decreased and weighted the responses based on company size to give a balance between -100 percent and 100 percent, with a positive number denoting the growth.
Corporate intentions to invest also declined at the fastest pace since May 2020, during the first lockdown of the pandemic.
Separate research by the Employment and Employment Confederation found that the number of people hired for full-time jobs was hired at the fastest rate in more than two years in April, while hiring of temps continued to rise.
Martin Sartorius, Chief Economist at CIB, said: “Retailers continue to face a difficult business environment, with companies reporting disappointing sales and massive inflationary pressures. As a result, they are having to scale back their workforce and investment plans.”
However, there were reasons for retailers to be more optimistic, he said: “Consumer sentiment is improving and household energy bills are set to come down from July. The resulting increase in income should help support retail sales in the second half of this year.” .
Household incomes will benefit from the drop in the energy price cap announced yesterday and an expected slowdown in the pace of price rises in the coming months, but higher mortgage costs and cautious hiring by employers, said Samuel Tombs, chief UK economist at Pantheon Macroeconomics consultancy. Work will offset some of the benefits.
