Retailers have increased prices by the fastest rate since 1992, while consumer activity on the high street has fallen for a second consecutive month, according to CBI’s latest Distributive Trades Survey.
More than 40 per cent of retailers surveyed said their year-on-year sales volume had fallen, while some 30 per cent had experienced an increase.
The prices of goods in the year to May increased at their fastest rate in 16 years, as many retailers passed on the rising costs of energy, food and raw materials.
Ian McCafferty (pictured), 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,”