LONDON, May 28 (Reuters) - British retail sales fell more than expected in May and retailers believe a further deterioration is likely next month, a survey by the Confederation of British Industry showed on Thursday.
The CBI's distributive trades survey sales balance fell to -17 this month from +3 in April when the figures were boosted by the timing of Easter. Analysts had predicted a sales balance of -10.
Retailers expect sales to slow further in June, with the balance at -20. Markets showed little reaction but analysts said the figures still pointed to resilience on the high street.
"It's consistent with robust annual growth in the official measures of sales volumes of around 2.5 percent," said Vicky Redwood, UK economist at Capital Economics.
"Whether this strength continues in the face of the increasing drag on household income growth from the deteriorating labour market is another matter."
The CBI said retailers were struggling.
"Conditions were tough again in May for retailers, proving
April's better sales figure was a temporary blip. Trading
conditions are expected to remain difficult in June," said Andy
Clarke, chief operating officer of Asda
The quarterly business situation balance, however, rose to -8 from -26 in February, the highest since November 2007.
Retailers also expected to push up prices at a much slower rate with the expected prices balance falling to +15 from +35 in February, the lowest since August 2007.
"The harsh reality is that consumers need good reason to part with their hard-earned cash. Demonstrating you offer true value for money as a retailer has never been more important, and marks out the true survivors," said Clarke. (Reporting by David Milliken; editing by Stephen Nisbet)