• UK store sales bounce back in May, says BRC data

    UK retail sales increased by 2.8% last month on a like-for-like basis from May 2017, when they had decreased 0.4% from the preceding year, according to figures released by the British retail Consortium.

    On a total basis, sales increased 4.1% in May, against an increase of 0.2% in May 2017, above the 3-month and 12-month averages of 1.2% and 1.5%, respectively, and the highest increase since January 2014, when not including Easter distortions.

    Over the three months to May, in-store sales of Non-Food items declined 3% on a Total basis and 4.1% on a Like-for-like basis.

    On a 12-month basis, the Total decline was 0.2%. However, on a monthly basis, it was the best performance since January 2016, excluding Easter distortions.

    Over the three months to May, Food sales increased 2.0% on a like-for-like basis and 3.4% on a total basis. This is below the 12-month Total average growth of 3.6%, further evidence that growth has peaked, since inflation started to recede. On a monthly basis, this was the best performance since July 2013, excluding Easter distortions.

    Over the three-months to May, Non-Food retail sales in the UK decreased 1.4% on a like-for-like basis and 0.5% on a Total basis. This is below the 12-month Total average decrease of 0.2%. On a monthly basis, this was the best performance since January 2016, excluding Easter distortions.

    Online sales of Non-Food products grew 11.9% in May, against an easy comparable growth of 4.3% in May 2017. This is above the 3-month and 12-month averages of 8.8% and 8.1% respectively. Online penetration rate increased from 21.3% in May 2017 to 22.4% in May 2018.

    Helen Dickinson OBE, Chief-Executive at the British Retail Consortium, said: “Retail sales in May saw their highest growth since January 2014 as better weather and the bank holiday effect led shoppers to buy from garden furniture and summer fashion ranges; recovering some of the ground lost in April. Food sales also stood out with the best single month’s performance since July 2013. Encouragingly, growth was seen across channels as stores made a comeback with their best showing in 16 months.

    “The FA Cup Final and Royal Wedding may have got the nation in the mood for celebration but the day itself was a distraction for shoppers as they stayed at home to watch the festivities; sales also tailed off once the party was over.

    “Despite this more positive set of sales results, the retail environment remains extremely challenging, with trend growth still very low by historical standards. Retailers remain focused on investing in new and exciting shopping experiences for the future as margins remain tight and the competition fierce.”

    Paul Martin, Head of Retail at KPMG said: “May provided a much needed uplift to retail performance delivering a respectable 4.1 per cent growth. Two bank holiday weekends, a Royal wedding and of course sunnier spells will have been the main drivers behind the apparent rebound, with both online and high street sales thankfully up overall.

    “Grocery sales once again continued to be strong, boosted by added enthusiasm for picnics and barbeques. Elsewhere, appetite for non-food categories, including fashion, also experienced a welcome uplift. That said, the picture was less favourable in the larger discretionary categories such as home improvement and furniture.

    “While the month’s figures may paint a rosier picture, there is no room for complacency. The market is increasingly being split into winners and losers, with a number of legacy players continuing to face extremely challenging conditions. As such, focusing on transforming businesses both operationally and financially is pivotal.”

    AUTHOR

    Stuart O'Brien

    All stories by: Stuart O'Brien

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