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Retailers saw mild growth in May, despite a month of bank holidays
Paul Martin, UK Head of Retail at KPMG, said:
“Despite warmer weather, a national celebration and month of bank holidays, retailers saw pretty mild growth in May with sales figures up just 3.9% on last year, and lower than the 5% growth seen in April.
“High street retailers saw more categories slip into negative sales territory last month, with health, beauty and food driving sales on the high street. The gloom continued for online retailers with just four categories registering positive sales figures and total sales down by 1%. Online penetration rates continued to slide sitting at 36%, as consumers return to bargain hunting in store.
“Retailers will be hoping that inflation levels in the wider economy continue to move in the right direction in order to boost much needed consumer confidence. The wild card for the retail sector remains uncontrollable food inflation, which shows little sign of coming down in the near future, and this is having a significant knock-on effect on non-essential spending. The grocery sector is the fastest growing part of the consumer wallet at the moment, so consumers are having to spend more of their money in the one area that is getting disproportionately more expensive.
“UK consumers are resilient, but with stubbornly high food inflation continuing and the prospect of further interest rate rises threatening to impact their ability to spend elsewhere, it is likely to be a long, hot summer for the retail sector.”
The BRC KPMG Retail sales monitor is one of the UK’s most timely, and accurate performance indicators for UK sales. Read the full report complete with sales data from the British Retail Consortium.
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