Sunny skies help retail sales in May

SUNNY weather and preparations for the World Cup helped retail sales rise on a like-for-like basis in May, but nervous consumers are still holding off on purchases of big-ticket items, the latest survey from the British Retail Consortium (BRC) reveals today.

On a like-for-like basis, retail sales values rose 0.8 per cent in May on a year earlier, when sales had fallen by 0.8 per cent. In the three months to May, like-for-like sales were 1.2 per higher.

Food sales grew by one per cent after April’s year-on-year decline caused by the timing of Easter. Non-food sales rose 1.3 per cent as clothing, footwear outdoor DIY and leisure items all benefited from the sunny second half of the month.

Stephen Robertson, director-general of the BRC, said: “The sunnier second half of May provided a welcome boost to overall sales. The warmer weather combined with discounts and promotions encouraged spending on clothing, footwear, outdoor DIY and gardening.”

He added: “Consumer confidence has clearly improved since last year’s lows. But there’s still plenty of uncertainty, which is making customers nervous about buying expensive goods, such as furniture, despite widespread reductions. This month’s emergency Budget should provide more clarity.”

The May figures are more indicative of the underlying trend because the past couple of months have been impacted by the timing of Easter, according to Helen Dickinson, head of retail at KPMG, which co-conducted the survey.

Dickinson pointed out that the election campaign didn’t have a significant effect on patterns but warned that many retailers remain reliant on promotional activity to drive footfall and sales.

Non-food, non-store sales – transactions which take place over the internet, or via mail order or phone – surged 21.9 per cent in May on a year earlier. However, the BRC noted that this was against relatively weak growth in May 2009, which was the lowest growth for at least 18 months.

Robertson said: “Customers took advantage of the many online deals and promotions, especially on televisions in the lead-up to the World Cup, as well as clothing and footwear.”

However, the continuing theme is that of nervous consumers. Analysts think this is unlikely to disappear over the coming months as high unemployment, wage freezes and fiscal austerity continue to be felt.