Improved weather encouraged shoppers to venture out to stores in May as well as buy online, bringing the strongest sales growth in four years, new figures from the British Retail Consortium (BRC) suggest today. But, warned KPMG’s UK head of retail Paul Martin, this is becoming a market of winners and losers – in which traditional retailers are facing challenges.
Online sales of non-food products rose by 11.9% in May compared to the same time last year, according to the BRC-KPMG Retail Sales Monitor for May 2018. That’s well above the 4.3% growth seen in May 2017 and also ahead of the trend, with three and 12-month averages showing year-on-year online sales growing at more than 8%. At the same time, total UK retail sales, rose by 4.1% across all channels, compared to the same time last year, the figures suggest, with like-for-like (LFL) sales – that strip out the effect of store openings and closures – up by 2.8%.
Helen Dickinson, chief executive of the BRC, 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.”
She added: “The FA Cup Final and the 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.”
Food sales grew by 3.4% in total, in the three months to May, the report suggested, and by 2% LFL, while non-food sales fell by 0.5% in total and by 1.4% LFL. Dickinson said this was the strongest growth in food sales since July 2013.
Paul Martin, UK head of retail at KPMG, said: “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 barbecues.”
But he said there was no room for complacency in a month that saw less favourable performance in the sale of larger items such as home improvement accessories and furniture.
“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.”
