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Retail sales hit record lows both online and offline in May: BRC

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Retail conditions are at their toughest for a decade, the British Retail Consortium (BRC) said as it reported online sales growing by the weakest amount yet recorded in May – while sales across all channels fell by the steepest decline on record in May.

The BRC-KPMG Retail Sales Index Monitor for May 2019 found that retail sales fell by 2.7% in total, and by 3% on a like-for-like (LFL) basis, during the month, while ecommerce sales of non-food products grew by 1.5% in May – even though 30.3% of all retail sales took place online. That’s up from 28.2% in May 2018.

In contrast last May – when the sun shone, the football World Cup was getting underway and a royal wedding took place – sales grew by 4.1%in total, by 2.8% LFL, and ecommerce sales by 11.5%.

Helen Dickinson, BRC chief executive, said: “With the biggest decline in retail sales on record, the risk of further job losses and store closures will only increase. While May 2018 offered almost unbroken sunshine, topped off by the run up to the World Cup and the marriage of Meghan and Harry, May 2019 delivered political and economic uncertainty. Food sales dropped for the first time since June 2016, with further declines in clothing, footwear and outdoor goods.

“With retail conditions the toughest they have been for a decade, politicians must act to support the successful reinvention of our high streets and local communities. Business rates remain a barrier, preventing many retailers from investing in their physical space. We have a broken tax system, which sees retailers paying vast sums of money regardless of whether they make a penny at the till, and yet the Government is failing to act. The legislation is falling behind the technological revolution.”

In the three months to May, in-store sales of non-food products fell by 2.7%, both in total and LFL. That’s behind the 12 month average decline of 2.4%. Over the same period, online sales of non-food items grew by an average of 2.9% – and by 5.4% over the last year. 

Paul Martin, UK head of retail at KPMG, said the figures were a “stark reminder of the industry’s ongoing issues.” 

“The bank holiday weekends have given rise to the added interest in furniture and homewares, as shoppers set about making home improvements,” he said. “However the weather did little to convince fashion-minded shoppers to refresh their seasonal wardrobes. The extremely low growth online is real cause for concern, especially with almost a third of all non-food sales today being made online. This trend has continued to manifest itself over the last year and requires real focus from the retail community.”

Food sales, meanwhile, grew by 0.8% LFL in the three months to May, and by 1.9% in total – behind the 12 month average of 2.5%. 

Susan Barratt, chief executive of grocery analyst the IGD, said the food and grocery sector would be disappointed by May’s figures during a “tough period for year-on-year sales comparisons.” She added: “Food and drink spending is being spread around with shoppers using on average 12 different stores per month, including for top ups and food on the go.”

Image: Fotolia

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