Retail

‘Glimmers of hope’ in UK retail and consumer spending in May


The contractions in UK retail sales and consumer spending eased in May as some lockdown measures were relaxed, but both still recorded the second-sharpest fall on record after April’s low as swaths of the economy remained closed.

The value of retail sales dropped 5.9 per cent in May compared with the same month last year, according to data from the advisory services firm KPMG and the British Retail Consortium, an industry body.

The fall was less severe than the 19.1 per cent contraction in April, when the lockdown was in full force, but it is the second-largest contraction since the series began in 1995.

“Sales in May demonstrated yet another month of struggle for retailers across the country, despite an improvement on the previous month,” said Helen Dickinson, BRC chief executive.

Food, the DIY sector, bicycle equipment and office supplies improved their performance, but Ms Dickinson added: “For those shops whose doors remain shuttered it was once again a tough month and even those who stayed open suffered reduced footfall and huge costs implementing social distancing measures”.

With many shops not reopening until June 15, online sales continued to surge. The BRC reported a 60 per cent jump in May, year on year, in online non-food sales, well above the 12.9 per cent annual average.

“We’re also witnessing historically high levels of sales transacted online . . . and while this will ease as more stores open, consumers have formed new habits that will see the online channel continue to be more prominent going forward,” said Paul Martin, UK head of retail at KPMG.

Overall sales fell despite grocery spending continuing to perform well. In the three months to the end of May, food sales rose 9 per cent compared with the same period last year, much higher than the 12-month average of 2 per cent.

Line chart of Annual % change on rolling 3-month average in value terms showing UK food retail sales spiked

A less dramatic fall in spending was confirmed by Barclaycard, the payment company that claims to measure nearly half of the nation’s credit and debit card transactions. In May, the company reported a 26.7 per cent annual contraction in consumer spending, the second-largest drop since their records began in 2015 after the 36.5 per cent fall in April.

Together with a continued strong performance of supermarkets — for which spending rose by 24 per cent — the company reported an easing of the decline for spending on restaurants and bars. Bars, pubs and restaurants are not reopening until at least June 22 and they are one of the hardest hit sectors.

Spending on eating and drinking, other than grocery shopping, dropped 70 per cent in May compared with the same period last year, a figure that is marginally less severe than the 79 per cent contraction in April. Barclaycard said the improvement reflected the fact that more restaurants, pubs and cafés were able to offer delivery and takeaway services.

The company also reported rising sales at sports and outdoor outlets, as people bought items to help exercise while gyms remained closed.

“We are seeing certain sectors start to increase sales as the climate eases and they adapt,” said Esme Harwood, director at Barclaycard. “While the restrictions continue to have a significant impact there are glimmers of hope.”



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.