UK retail sales were up 0.5% on a like-for-like basis from May 2013, when they had increased 1.8% on the preceding year. On a total basis, sales were up 2.0%, against a 3.4% rise in May 2013.
Clothing was the best performing category, reporting its highest growth since December 2011, while Food was the lowest, reporting a decline in total terms.
The 3-month average year-on-year change for Food was -0.2% in total, turning negative for the first time since our record began in 2008, excluding Easter distortions. For Non-Food, the 3-month average was 4.3%, ahead of the 12-month trend of 3.8%.
Sector performance (total sales) - by Anne Alexandre, Senior Analyst, BRC
Clothing
Clothing was the best-performing category in May. The warmer weather induced a step-change in the shopping mood, with all segments performing well, led by the largest segment, Women’s. Casual jersey and printed trousers did well, together with branded fashion. Summer accessories like sunglasses saw good demand. The availability of World-Cup-themed ranges in the run-up to Father’s Day was cited as a success in the Men’s segment. However, Children’s and Women’s also benefited from that theme. In addition to summer ranges, school-wear also sold well in the Children’s segment. It must be pointed out that May’s performance was flattered by a soft comparable period in 2013, once adjusted for the shifts induced by the extra week this year. It was felt that fewer promotions were run than last year.
House Textiles
House Textiles posted another good performance, with increased demand for lightweight duvets in the warmer weather.
Home Accessories
Home Accessories was the best of all three Home segments in May, ranking just behind the fashion categories in the overall rankings table. Lighting was cited as a very good performer.
Online sales of non-food products in the UK grew 17.0% in May versus a year earlier. The Non-Food online penetration rate was 18.7% in May, the second highest recorded, after last November.
Helen Dickinson, Director General, British Retail Consortium, said: “This quarter sees overall growth in the retail economy with non-food items accelerating: their three-month average growth was 4.3 per cent against the twelve-month figure of 3.8 per cent.
“Customers took advantage of great summer fashion ranges and clothing sales had their best results since December 2011, performing better than any other category. There is also strong momentum in big ticket sales such as consoles and televisions as customers feelconfident enough in the economy to make purchases that had been on hold, waiting for economic recovery.
“But there is a very clear pattern in food sales emerging where customers continue to be discerning in search of value. Supermarkets are providing great quality food in a very competitive market and this shows in the three-month average food growth, which turned negative for the first time since our records began in 2008 (excluding Easter distortions). Let’s hope this rebalancing will eventually be rewarding for retailers.”
David McCorquodale, Head of Retail, KPMG, said, “The recovery is gaining pace in the retail sector, but the latest figures reveal the scale of the paradox that has emerged. While non-food retailers are seeing steady sales growth, the grocers appear locked in a race to the bottom, imposing price cut after price cut to maintain their sales volumes. This price war is hindering the retail sector’s overall recovery, which without the effects of these cuts would have seen like for like sales growth outpace inflation over the last quarter.
“With Easter distortions now behind us, the non-food sector is showing encouraging signs of growth with total sales growing by more than 4 per cent over the last quarter. Clothing and footwear led the charge, although furniture and flooring sales are also encouragingly higher than inflation for the quarter. Consumer confidence can still be fickle, but the response to targeted campaigns has been positive. Retailers are investing in their businesses and planning for further growth at home and abroad.
“The main barrier to recovery is now the grocers’ battle over price. The deflationary effect of these prolonged discounting campaigns, whilst good for consumers, is feeding through to the grocers’ margins and share values. The constant price matching brings into question the long term value of the grocers’ brands and positioning, but in the short term is providing the UK consumer with plenty of options.”
