Despite a downturn in April due to inclement weather, May saw a notable recovery in retail sales.
- Sales volumes increased across most sectors, with clothing retailers experiencing a significant rebound.
- The April decline of 1.8% was less severe than initially predicted, revised from an anticipated fall of 2.3%.
- British consumers remain cautious amidst the ongoing cost of living crisis, despite a potential easing of recessionary behaviours.
- The role of bank holidays, including the King’s coronation, has had a measurable impact on consumer spending patterns.
The Office for National Statistics (ONS) recently published its figures for retail sales in May, highlighting a remarkable 2.9% increase compared to the preceding month. This upswing contrasts sharply with April’s downturn, wherein sales dropped by 1.8%, primarily attributed to adverse weather conditions. The revised April figures, initially forecasted to decline by 2.3%, offer a slightly more optimistic view.
May’s recovery in retail sales has been evident across various sectors, with clothing retailers particularly benefiting from the improved climate. Textiles and clothing sectors reported a 5.4% increase in sales, while department stores saw a modest 1.7% rise. These trends are within the reporting period spanning from 28 April 2024 to 25 May 2024, underscoring a robust demand resurgence post-April’s slump.
Further dissecting the quarter’s data, a 1% rise in retail sales was observed when compared to the previous three months, however, a 0.2% decrease was noted against the same quarter last year. The ONS has pointed out that the additional bank holiday on 8 May 2023 for the King’s coronation could be a contributing factor to this variance, adding an interesting layer of context to the observed fluctuations in retail activity.
Consumers in Britain continue to grapple with the cost of living crisis, exacerbated by prolonged periods of high inflation which only recently returned to the Bank of England’s target rate of 2%. Oliver Vernon-Harcourt, head of retail at Deloitte, observed that the retail sector saw growth in May’s sales volumes thanks to a series of double bank holidays, marking the first growth since January.
Vernon-Harcourt noted a shift in consumer behaviour, remarking that there’s an easing in recessionary tendencies. Sales in non-food stores marked the highest rise in volumes since April 2021, reflecting a potential uplift in consumer confidence. He expressed hope for sustained spending momentum as the warmer days and the summer of sport continue.
Retailers may witness a gradual yet positive shift in consumer spending patterns if current trends persist.
