UK retail sales drop 1.1% in May 2022 on total basis: BRC

UK retail sales decreased 1.5 per cent on a like-for-like basis from May 2021, when they had increased 18.5 per cent. This was below the 3-month average decline of 1.1 per cent and the 12-month average growth of 1.8 per cent, BRC said in a its latest report covering the four weeks 1 – 28 May 2022.

Over the three-months to May, non-food retail sales decreased by 1 per cent on a like-for-like basis and increased 2 per cent on a total basis. This is below the 12-month total average growth of 7 per cent. For the month of May, non-food was in decline year-on-year.

Over the three months to May, in-store sales of non-food items grew 31.5 per cent on a total basis and 24.1 per cent on a like-for-like basis. This is below the total 12-month average growth of 39.2 per cent. On a three-year comparison, over the three months to May, in-store sales of non-food items declined 57.5 per cent (Yo3Y) on a total basis since May 2019, the report said.

Online non-food sales decreased by 8.5 per cent during May, compared with a decline of 8.1 per cent in May 2021. This is above the 3-month decline of 18 per cent. On a three-year comparison, online non-food sales increased by 34.7 per cent (Yo3Y) in May. This is below the 3-month average increase of 41.4 per cent. Non-Food online penetration rate decreased to 38.7 per cent in May from 42.2 per cent in May 2021. However, it was up 7.3 percentage points on the 31.4 per cent seen at the same point in 2019.

Helen Dickinson OBE, chief executive, British Retail Consortium, said: “Sales continued to see declines as the cost-of-living crunch squeezed consumer demand. Fashion and beauty did well as people prepared for holidays abroad and the summer’s social calendar; with red, white and blue outfits adorning shopping carts ahead of the Jubilee weekend. Meanwhile, online sales appear to have stabilised at a ‘new normal’, with the share of total non-food retail sales coming through digital channels settling at around 39 per cent compared with 30 per cent pre-pandemic, though this is well down on lockdown peaks.

“It is clear the post-pandemic spending bubble has burst, with retailers facing tougher trading conditions, falling consumer confidence, and soaring inflation impacting consumers spending power. Supply chain issues including rising commodity and transport costs, a tight labour market and higher energy bills are forcing retailers to increase their prices, contributing to wider inflation. Profits may be squeezed further, as retailers continue to find efficiencies in their own operations and supply chains to reduce the impact of future price rises for consumers.”

Paul Martin, UK head of retail at KPMG, said: “For the second month in a row UK retail sales declined, highlighting that consumers are becoming more sensitive to the cost of living. There was better news though for clothing, footwear and accessories sales, with both in-store and online purchasing driven up by the approach of the summer season and the promise of outdoor events and travel firmly on many consumers’ radars.

“The rising cost of living is going to remain the main story for retailers for the immediate future, with consumer confidence a key factor to watch out for. Retailers will be hoping that a post-Jubilee and summer feel-good factor begins to improve confidence amongst some shoppers – as presently overall confidence levels are lower than sales may suggest.”

Fibre2Fashion News Desk (KD)