Thursday 20 June 2019 10:43 am

Cold weather dampens May retail sales

Retail sales suffered a setback last month as volumes dropped 0.5 per cent month-on-month driven by unseasonably cold weather.

Sales were up 2.3 per cent compared to May last year, representing the smallest annual rise since October 2018.

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In April the year-on-year increase was 5.1 per cent, while in March it was 6.7 per cent, according to the latest data from the Office of National Statistics (ONS).

ONS head of retail sales Rhian Murphy said: “Retail sales continued to grow in the latest three months despite two consecutive monthly falls, with clothing sales declining considerably in May, due to unseasonably cold weather.

“We see quite a mixed picture across the rest of the sector as the decline in department store sales continued, with no growth since September of last year.”

Department stores and clothes shops hit the hardest

The department store sector has not seen an increase in quarterly sales since September 2018, and May marked the eight consecutive month of no growth.

In the three months to May the struggling department store sector saw a 0.9 per cent decline in the quantities bought.

Clothing store sales slowed rapidly last month to 0.3 per cent as customers delayed stocking up their summer wardrobes due to poor weather. In March and April this year the sector saw strong growth of 7.2 per cent and 9.2 per cent respectively.

“Considering we are facing a summer of political upheaval and ongoing Brexit uncertainty, it seems only logical that consumers are being cautious by not flashing their cash on ‘nice to haves’,” said Emma-Lou Montgomery, associate director for personal investing at Fidelity International.

Online sales increase

Online sales increased by 8.2 per cent last month compared to May 2018, accounting for 19.3 per cent of all retail sales. However, sales were flat month-on-month for the amount spent.

Karen Johnson, head of retail and wholesale at Barclays Corporate Banking, said: “It’s certainly true that some retailers are keeping consumers spending by finding innovative ways to get customers into their stores and onto their websites.

“Whether that’s through a more experiential focus in-store, making online shopping simpler, or even demonstrating their sustainability credentials, parts of the sector are showing that it is possible to appeal to shoppers and keep sales ticking over as summer finally approaches.”

“We don’t believe that this is a sign of weaker consumer confidence,” Lisa Hooker, PwC consumer markets leader, said.

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“But it does show how vulnerable the sector is to both short term factors as well as the need to structurally reinvent the high street to give consumers more reasons to visit, particularly given increasing net store closures.”

She added: “Looking ahead, the washout start to June is already proving to be a headache for some retailers.”