Retail Sales Picks Up In May After Two Flat Months

Despite uncertainty about the economy and concerns over the UK’s possible exit from the EU, retail sales showed a small improvement last month with like-for-like sales edging up 0.5% year-on-year. The figures from the BRC – KPMG Retail Sales Monitor also showed total sales in May up 1.4% after two flat months.

Describing the figures as better news for the UK’s retailers, Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said: “Clothing made a big comeback this month after suffering declines in April. This appears to be due to consumers waiting for just the right moment before embarking on their pre-summer spending. However, with signs that the UK’s economy is slowing it’s unlikely that this is the beginning of a complete reversal of fortunes. The uncertain outlook means that customers will remain cautious with their spending, therefore we expect sales figures to remain volatile for the time being.

“While this month’s pick-up in sales will come as a welcome relief, it’s still a challenging time for retailers. Shop price deflation continues and intensity of competition is fierce. Controlling costs and improving efficiency and productivity will be crucial for retailers as they continue to navigate increasingly tough trading conditions.”

David McCorquodale, Head of Retail, KPMG, added: “Despite rain dampening the May Day mood, fashion sales finally lifted following a tough three months of trading for retailers. The appearance of some spring sunshine encouraged consumers to hit the sales and take advantage of early summer promotions.

“The standout category, however, was children’s footwear, and children’s clothing also saw a boost as parents kitted out the kids for the warmer weather and half term holidays. Mild relief also continued for the Grocers with total food and drink sales remaining positive in the month.

“With a summer of sport kicking off in June and festival season getting underway, retailers will be hoping that the feel good factor coupled with a dose of summer sunshine will keep the tills ringing over the summer months.”

Meanwhile, commenting on the Food & Drink sector, Joanne Denney-Finch, Chief Executive of IGD, said: “An increase in sales for May over last year, in spite of lower prices, is encouraging for food and grocery companies, especially as it cannot be attributed to particularly warm weather. For only the second time since we started tracking this question in 2010, a higher number of grocery shoppers plan to focus more on quality in the year ahead (22%) than those prioritising saving money (19%).

“There is further cause for optimism. Big international football tournaments are usually good for food and drink sales and this time there are three UK teams to support.”