Despite a strong bank holiday weekend for retailers, minimal improvement to weather across most of May meant only a modest rebound in retail sales last month.
According to the latest BRC-KPMG Retail Sales Monitor for May 2024, UK Total retail sales increased by 0.7% year on year in May, against a growth of 3.9% in May 2023. This was above the 3-month average growth of 0.3% and below the 12-month average growth of 2.0%.
Food sales increased 3.6% year on year over the three months to May, against a growth of 9.6% in May 2023. This is below the 12-month average growth of 6.4%. For the month of May, Food was in growth year-on-year.
Non-Food sales decreased 2.4% year on year over the three-months to May, against a growth of 0.7% in May 2023. This is steeper than the 12-month average decline of 1.7%. For the month of May, Non-Food was in decline year-on-year.
In-store Non-Food sales over the three months to May decreased 2.7% year on year, against a growth of 2.9% in May 2023. This is below the 12-month average decline of 1.1%.
Online Non-Food sales increased by 1.5% year on year in May, against an average decline of 3.0% in May 2023. This was above the 3-month and 12-month average declines of 1.8% and 2.6% respectively.
The online penetration rate (the proportion of Non-Food items bought online) increased to 36.7% in May from 35.9% in May 2023. This was slightly higher than the 12-month average of 36.1%.
Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said: “Although non-food sales fell over the course of the month, the long weekend did see increased purchases of DIY and gardening equipment, as well as strong clothing sales. Growth in computing sales reached their highest levels since the pandemic, with many consumers continuing to upgrade tech bought during that period. Retailers remain optimistic that major events such as the Euros and the Olympics will bolster consumer confidence this summer.
“With an election only four weeks away, retailers stand ready to collaborate with the next government to unlock economic potential, benefiting customers, colleagues, and communities alike. Cross government co-ordination and outcome driven policy making must no longer be an afterthought in government decision making. Retail really is the “everywhere economy”, and with the right policy environment can use its scale and reach to support public policy goals.”
Linda Ellett, UK Head of Consumer, Retail & Leisure, KPMG, said: “Whilst May’s figures show barely positive increases in retail sales, with less than one percent growth year-on-year, the impact of falling CPI – which means volumes are not declining as quickly, may help to soften the blow for hard-working retailers.
“With the early bank holiday and some better weather, there was a big step up in the number of categories that saw positive high street sales growth which was close to 3-in-4. Health, personal care, beauty and computing continued to sell well, whilst women’s and children’s clothing also saw small increases in sales. After nearly three years, things may have turned a corner for online retailers, with year-on-year sales growth across most categories, including toys and baby equipment and house textiles.
“Whilst sales growth was minimal, it could point to some signs of recovery for the sector, and retailers will be eager for that trend to continue as they carefully maintain their pricing, stock and cost base. Over the coming weeks retailers will be hoping that warmer weather, purchases related to summer holiday demand and Euro 2024 provide a stimulus to get consumers buying again. The economy may be improving, but the health of the sector remains fragile, with major investment held back by many until there are clear signs that consumer confidence has turned into spending.
“With the General Election date fixed, retailers will be keen to hear positive measures to help boost the economy and, in particular, signs that long awaited changes to the business rates regime are finally on their way.”
