BRC: store sales make a comeback in May

In Industry Comment, Industry News On

The British Retail Consortium (BRC) and KPMG have revealed the figures from their retail sales monitor for May 2018, with UK retail sales increasing by 2.8% on a like-for-like basis from May 2017, when they had decreased 0.4% from the preceding year.

On a total basis, sales increased 4.1% in May, against an increase of 0.2% in May 2017. This is 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 3.0% 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.

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.

British Retail Consortium chief executive Helen Dickinson OBE commented: “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.”

KPMG head of retail Paul Martin added: “May provided a much needed uplift to retail performance delivering a respectable 4.1% 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.

“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.”

IGD chief executive Joanne Denney-Finch noted: “Warm dry weather in May combined with the Royal Wedding provided excellent conditions for food and grocery sales; especially beers, wines and spirits.

“The World Cup in June could prolong this run, and if we are really lucky, into July. There has also been a moderate rise in shopper confidence. 26% expect to be better off in the year ahead up from 23% in April and 22% this time last year.”

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