Tills ring again in May after discounting and summer sun

Ben Southwood
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RETAIL sales showed a sharp uptick in May compared to a year earlier, Office for National Statistics data released yesterday showed.

The overall 3.3 per cent year on year rise was drive by increases in expenditure of 3.9 per cent on household goods, 0.7 per cent on textiles and most importantly 4.1 per cent on food.

Internet sales increased 21.6 per cent on the year, with especially large increases again coming in food and household goods.

Their average weekly value climbed to £510.9m, making up 8.8 per cent of all non-fuel sales.

Small businesses, of 10-39 employees, enjoyed 12.2 per cent growth whereas those with over 100 employees grew just 2.9 per cent.

“The seemingly shy sunshine, hardly seen since March, had created pent-up demand for summer goods which was finally unleashed,” said Stephen Robertson, British Retail Consortium Director General.

“Modest sales of coats and carpets gave way to much better sales of T-shirts and barbecues as interest finally turned outdoors.” he added.

“Abstracting from recent volatility, the overall level of retail sales was broadly the same in May as at the start of the year,” said Samuel Tombs at Capital Economics.

Tombs warns the sector will make a negative contribution to GDP growth in the second quarter, unless June sales increase by at least one per cent.

Nida Ali, economic adviser at Ernst & Young said the “robust boost” was due to “a combination of one-off factors”, and believes that the growth is likely to be temporary.

David McCorquodale, European head of retail at KPMG, yesterday put the figures down to “a combination of summer sun and heavy discounting.”

He warned this discounting would have a negative impact on retailers’ profitability.