UK retailers hit again in May, some signs of respite: CBI

(C) Reuters. Outbreak of the coronavirus disease (COVID-19) in London

LONDON (Reuters) – Britain’s retailers suffered another sharp slide in sales in May but there were some signs that the sector was past the worst of the hit from the coronavirus lockdown which the government is gradually easing, an industry survey showed on Tuesday.

Eight out of 10 British retailers reported cash flow difficulties, down modestly after a nightmarish April, the Confederation of British Industry (CBI) said.

Its monthly gauge of retail sales rose to -50 from in May, still a historically weak reading but up from a joint record low of -55 in April, as expected in a Reuters poll of economists.

“The retail sector is at the sharp end of a crisis, with many businesses up against it,” CBI chief economist Rain Newton-Smith said.

Retailers might need more support from the government if demand falters as outlets reopen in the coming weeks, she said.

Prime Minister Boris Johnson said on Monday that Britain will reopen thousands of high street shops, department stores and shopping centres next month.

Retail sales fell by the most on record in April, according to official data last week, as much of the sector was shuttered by the government’s coronavirus lockdown.

Supply chain disruptions worsened over the past month, the CBI survey showed, with a majority of retailers reporting shortages of some goods and increased cost pressures.

More than half of the companies surveyed said they had laid off staff temporarily while 8% had made permanent redundancies.

“The government’s support packages are making a real difference, with more shops reporting that jobs have been furloughed, rather than lost,” Newton-Smith said.

Investment intentions across retail, wholesale and distribution companies collapsed to a record low over the last few months, the survey showed.