Online sales growth slowed to 10.4% in May while total UK retail spending fell by more than 2%, according to the latest figures.
The BRC-KPMG Retail Sales Monitor for May 2011 showed evidence that consumers, concerned by job and money worries, were reluctant to spend.
This is the first month, said the British Retail Consortium, free from the distortion of sales figures caused by extra bank holidays and a late Easter. The resulting picture showed a 2.1% fall in like-for-like retail sales in May 2011, compared to the previous May when sales rose by 0.8%. Total sales for the month were down by 0.3% compared to last year, against a 3% rise in May 2010.
Stephen Robertson, director general of the British Retail Consortium, said this was “a more realistic reflection of how tough conditions on the high street really are.”
Online performance was also weaker than it has been. Figures for internet, mail order and phone sales (non-food, non-store sales) during the month showed that sales were 10.4% higher than a year ago. Last May they were up by more than 20%, whereas last month, in April, they were up by 13.7%.
Robertson said: “This is slower growth than the previous month which was helped by Easter and bank holidays but the contrast between April and May is much less stark than for retailing as a whole.
“New catalogues and more use of emailed discount vouchers helped non-store sales but the big driver continues to be the strong underlying growth of online retailing, particularly via mobile devices.
“We are working hard to support that growth by encouraging law maker in Westminster and particularly in Brussels to make sure policy supports trade at the same time as delivering protection for consumers.”
Helen Dickinson, head of retail at KPMG, said: “For the first time in a number of months we have a clearer picture of the underlying trend without the distortions of the timings of Easter and bank holidays, and it doesn’t make for happy reading.
“The last half of the month was the most challenging given the good weather and World Cup last year. Across the month, virtually all non- food sectors experienced negative like-for-like sales to varying degrees reflecting consumer’s reticence to spend as the disposable income squeeze tightens its grip.
“This, combined with falling margins driven by a greater focus on price, lower average transaction values and increasing manufacturing costs is leaving many retailers coping with a “double whammy” impact on cash flows.”
