- UK retail sales values were up 1.8% on a like-for-like basis from May 2012, when they had increased 1.3% on the preceding year. On a total basis, sales were up 3.4%, against a 3.4% increase in May 2012.
- Total growth of 3.4% was above the 3-month average of 2.3% and the long-term 12-month average of 2.5%.
- Furniture and Flooring was the best-performing category for the first time since January 2011.
- Online sales were up 11.0% compared with May 2012, when they had risen by 12.4%.
Helen Dickinson, Director General, British Retail Consortium, said: “Retailers pulled off a good result in May despite contending with topsy-turvy temperatures and continued economic difficulties. The first month since February to be free of Easter timing distortions showed positive total growth in every category and overall growth well above the twelve-month average.
“May was a month of two halves for weather, meaning that retailers had to stay one step ahead when planning their promotional activity. The signs are that temporary discounts and offers worked well to tempt shoppers into stores and clear some of the stock that had been slow to sell during the preceding months. This strategy paid off particularly well for furniture and flooring, May’s best-performing category. Meanwhile, seasonal fashions returned to form when sunshine set in early in May, but growth slumped with temperatures in the second half of the month.
“The signs are that retailers read conditions well in May and adapted their offer accordingly. Customers are still price-conscious but responding well to good deals, especially for big-ticket items. But volatile economic conditions mean that this will remain a delicate balancing act for some time to come.”
David McCorquodale, Head of Retail, KPMG, said: “While sales didn’t soar through the roof, this is still a very creditable performance from UK retailers. Remember, these are “back to basics” sales that haven’t been artificially boosted by one-off factors like Easter or last year’s Jubilee. Promoting the right product at the right price made the difference in May.
“To some extent retailers had their bacon saved by online sales, underlining the growing importance of the digital channel. Online sales growth helped to counter variable performances on the high street as many chose to take advantage of the same promotional offers from their sofas.
“Whilst growth in Food was much in line with inflation, the categories of Furniture and Flooring, Other Non-Food and Childrenswear fared best. Electricals, still impacted by the effect of Comet, performed strongly and gardening and DIY fared better on the dry days. In the fashion world, consumers appear to have accepted the fact that summer may not involve days on end of glorious sunshine and have slowly succumbed to replenishing their wardrobes.
“Consumers remain highly sensitive about price and retailers are increasingly using promotional activity to drive footfall or the online equivalent. Just how much margin is being given away to boost sales is yet to be seen in the retailers’ accounts but, on the surface, these promotions seem to be working.”
Food & Drink sector performance – Joanne Denney-Finch, Chief Executive, IGD, said: “Overall, May’s total food and drink sales were roughly in line with inflation.
“A spell of warm weather early in the month boosted sales but this was short-lived. Food companies will be hoping for extended sunshine in June to help offset last year’s Jubilee-enhanced comparatives.
“With the longer evenings and thoughts turning to summer holidays, there could be an opportunity to provide shoppers with more affordable treats. Our ShopperVista research shows that one in five (19 per cent) who has extra cash available, says they will spend more money on indulgent food and drink, up from 12per cent in 2007.”
The BRC-KPMG Retail Sales Monitor measures changes in the actual value (including VAT) of retail sales, excluding automotive fuel. The Monitor measures the value of spending and hence does not adjust for price or VAT changes. If prices are rising, sales volumes will increase by less than sales values. In times of price deflation, sales volumes will increase by more than sales values.
Retailers report the value of their sales for the current period and the equivalent period a year ago. These figures are reported both in total and on a ‘like-for-like’ basis.
Total sales growth is the percentage change in the value of all sales compared to the same period a year earlier. The total sales measure is used to assess market level trends in retail sales. It is a guide to the growth of the whole retail industry, or how much consumers in total are spending in retail – retail spending represents approximately one-third of consumer spending. It is this measure that is often used by economists. Many retailers include distance sales as a component of total sales.
'Like-for-like' sales growth (LFL) is the percentage change in the value of comparable sales compared to the same period a year earlier. It excludes any spending in stores that opened or closed in the intervening year, thus stripping out the effect on sales of changes in floorspace. Many retailers include distance sales as a component of like-for-like comparable sales.
The like-for-like measure is often used by retailers, the city and analysts to assess the performance of individual companies, retail sectors and the industry overall, without the distorting effect of changes in floorspace.
Online (including mail order and phone) sales of non-food are transactions which take place over the internet, or via mail order or phone. Online sales growth is the percentage change in the value of online sales compared to those in the same period a year earlier. It is a guide to the growth of sales made by this non-store channel. It should be noted that online sales are still a small proportion of total UK retail sales. Estimates based on ONS figures show about 9 per cent of total UK retail sales (food and non-food) are achieved via the non-store channel.
The responses provided by retailers within each sales category are weighted (based on ONS weightings) to reflect the contribution of each category to total retail sales, thus making it representative of UK retail sales as a whole. Because the figures compare sales this month with the comparable period last year, a seasonal adjustment is not made. However, changes in the timing of Bank Holidays and Easter can create distortions, which should be considered in the interpretation of the data.
As well as receiving sales value direct from the retailers in the scheme the BRC-KPMG Retail Sales Monitor also receives food and drink sales value data from the IGD's Market Track Scheme.
In its role as sponsor of the BRC-KPMG Retail Sales Monitor, KPMG is responsible for the aggregation of the retail sales data provided by the retailers on a weekly basis. This data consists of the relevant current week’s sales data and comparative sales figures for the same period in the prior year. The aggregation has been performed by KPMG on data for periods following 2 April 2000 and equivalent prior periods.
The accuracy of the data is entirely the responsibility of the retailers providing it. The sponsorship role has been performed by KPMG since 10 April 2000 and the same for the aggregation of comparative sales figures for the period from 2 April 2000 it is not responsible for the aggregation of any data included in this Monitor relating to any period prior to 2 April 2000. The commentary from KPMG is intended to be of general interest to readers but is not advice or a recommendation and should not be relied upon without first taking professional advice. Anyone choosing to rely on it does so at his or her own risk. To the fullest extent permitted by law, KPMG will accept no responsibility or liability in connection with its sponsorship of the Monitor and its aggregation work to any party other than the BRC.
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