In May, retail sales experienced a notable recovery, following a previous decline in April.
- The Office for National Statistics reported a 2.9% increase in sales volumes from April.
- Clothing and department stores were significant contributors to the sales surge.
- An additional bank holiday in May played a crucial role in boosting consumer spending.
- Despite the improvement, economic challenges such as inflation continue to affect consumer behaviour.
In May, the retail industry witnessed a significant upturn as sales grew by 2.9%, a noteworthy improvement from the 1.8% decline experienced in April. According to figures released by the Office for National Statistics (ONS), the April dip was originally predicted to be 2.3% but was later revised, indicating that the drop was not as severe as initially thought.
Sales volumes saw an increase across most sectors, with clothing retailers experiencing a rebound as May replaced the wet weather of April with more favorable conditions for shopping. The textile and clothing sector saw a 5.4% rise, while department stores noted a 1.7% increase in sales volumes. The reporting month spanned from 28 April 2024 to 25 May 2024, capturing the positive momentum in retail.
During the three months leading up to May, retail sales rose by 1% compared to the previous quarter, although there was a slight 0.2% decline when looking at the same period last year. The ONS attributed some of this decline to the additional bank holiday in 2023 for the King’s coronation, which affected year-on-year comparisons.
The continued cost of living crisis and high inflation remain influential factors for British consumers, although the inflation rate has recently returned to the Bank of England’s target of 2% after nearly three years. This economic context has made consumers more hesitant, although there appears to be a shift as more individuals begin to spend on discretionary items.
Oliver Vernon-Harcourt, head of retail at Deloitte, highlighted the impact of May’s double bank holidays, noting that retail sales volumes experienced growth for the first time since January. Vernon-Harcourt remarked, “The tide could be finally turning for retailers, with more consumers releasing their purse strings and spending on discretionary items such as clothing and furniture.”
Additionally, there is optimism within the retail sector regarding the potential for continued spending momentum, as non-food store sales in May demonstrated the largest volume increase since April 2021.
Overall, the retail landscape appears to be shifting. With the summer season and sporting events on the horizon, there is hope within the sector that the positive trend will continue as consumers grow more confident about their disposable income.
Retail sales in May indicate a positive shift in consumer behaviour, but economic challenges remain influential.
