Retail sales in the UK saw a significant increase of 2.9% in May, surpassing economists‘ expectations. This positive growth was attributed to various factors such as increased footfall, better weather, and attractive deals that enticed shoppers back to high streets. The previous month had seen a decline in sales due to heavy rain across the country, dampening consumer demand.
Non-food shops experienced strong growth in May, with notable rebounds in clothing and furniture sales. The Office for National Statistics (ONS) reported that footwear, sports equipment, games, and toys outlets also saw improvements in their sales figures. This uptick in retail sales was a welcome surprise for many, as economists had predicted a more modest increase of around 1.5%.
The ONS also revised its retail sales figures for April, revising the initial estimate of a 2.3% decline to a slightly less severe drop of 1.8%. Silvia Rindone from EY noted that the bank holidays in May provided retailers with a much-needed boost in sales. She also highlighted upcoming events such as UEFA Euro 2024 and the Paris Olympics, along with better weather and potential political changes, as factors that could further stimulate consumer confidence and drive sales.
Non-food outlets, including department stores and homeware shops, reported a significant 3.5% increase in sales volumes in May, marking the largest monthly rise in three years. The ONS attributed this growth to improved footfall, better weather, and promotional activities. Online retailers also saw a substantial 5.9% month-on-month increase in sales, indicating a shift towards more online shopping.
Economist Andrew Wishart suggested that lower inflation may be encouraging consumers to spend more, leading to stronger retail sales. He noted that if inflation remains stable, it may not hinder a potential interest rate cut in August. Oliver Vernon-Harcourt from Deloitte also observed that recessionary behaviors are easing, with consumers showing a willingness to spend on discretionary items like clothing and furniture.
Kris Hamer, director of insight at the British Retail Consortium, highlighted the potential impact of the start of Euro 2024 on retail sales in June. He mentioned that if England performs well in the competition, it could boost consumer confidence and drive spending on items like snacks, alcohol, and television sets. Overall, the positive growth in retail sales in May indicates a promising trend for the UK retail sector, with hopes for continued improvement in the coming months.