The retail industry witnessed a modest recovery in May amid challenging conditions.
- Overall retail sales increased by 0.7% compared to May 2023, though growth slowed from previous months.
- Non-food sales experienced a decline due to adverse weather impacting consumer footfall.
- Online shopping showed resilience with a slight increase in non-food sales online.
- Sector leaders anticipate potential growth from upcoming summer and sports events.
The retail sector experienced a minor recovery in May 2024, with total retail sales increasing by 0.7% year on year. Although this figure marks an improvement, it falls short of the 3.9% growth observed in May 2023. The British Retail Consortium (BRC) and KPMG reported that this year’s performance exceeded the three-month average growth of 0.3% but remained below the 12-month average of 2.0%.
Non-food retail sales suffered a decline of 2.4% over the three months leading to May, contrasting with a growth of 0.7% in the corresponding period last year. This downturn surpassed the 12-month average decline rate of 1.7%, emphasising the sector’s challenges. Specifically, in-store non-food sales decreased by 2.7%, while online sales showed a modest growth of 1.5% compared to the previous year.
The online shopping landscape exhibited some resilience, as the online penetration rate for non-food items increased to 36.7% in May from 35.9% a year earlier. This figure slightly surpassed the 12-month average of 36.1%, indicating a gradual shift towards digital retail channels.
Despite the optimism from the bank holiday weekend, the bulk of May’s poor weather patterns hindered a more substantial recovery in retail sales. Helen Dickinson, the BRC’s chief executive, noted that the minimal improvement in weather conditions limited consumer spending rebound.
Linda Ellett from KPMG highlighted the sectors that performed well amid these challenges, mentioning, ‘Health, personal care, beauty and computing continued to sell well, whilst women’s and children’s clothing also saw small increases in sales.’ Future growth is anticipated, driven by warmer weather, summer holiday demands, and events like Euro 2024. However, the sector’s health remains fragile due to cautious investment and tentative consumer confidence.
Overall, May’s retail sales figures suggest a cautious optimism as sectors brace for potential growth in upcoming months.
