Helen Dickinson OBE, Chief Executive, British Retail Consortium says:
“Today's figures bring better newsfor the UK's retailers. After two months of flat sales May saw growth of 1.4 per cent. While still not spectacular, it is in line with the 12-month average of 1.5 per cent.
"Clothing made a big comeback this month after suffering declines in April. This appears to be due to consumers waiting for just the right moment before embarking on their pre- summer spending. However, with signs that the UK’s economy is slowing it’s unlikely that this is the beginning of a complete reversal of fortunes. The uncertain outlook means that customers will remain cautiouswith their spending, therefore we expect salesfigures to remain volatile for the time being.
"While this month's pick-up in sales will come as a welcome relief, it's still a challenging time for retailers. Shop price deflation continues and intensity of competition is fierce. Controlling costs and improving efficiency and productivity will be crucial for retailers as they continue to navigate increasingly tough trading conditions."
David McCorquodale, Head of Retail, KPMG says:
“Overall, retail sales showed some improvement in the month, up 1.4% in total versus May last year. Despite rain dampening the May Day mood, fashion sales finally lifted following a tough three months of trading for retailers. The appearance of some spring sunshine encouraged consumers to hit the sales and take advantage of early summer promotions.
“The standout category, however, was children’s footwear, and children’s clothing also saw a boost as parents kitted out the kids for the warmer weather and half term holidays. Mild relief also continued for the Grocers with total food and drink sales remaining positive in the month.“With a summer of sport kicking off in June and festival season getting underway, retailers will be hoping that the feel good factor coupled with a dose of summer sunshine will keep the tills ringing over the summer months".
Food & Drink sector performance,Joanne Denney-Finch, Chief Executive, IGD says:
“An increase in sales for May over last year, in spite of lower prices, is encouraging for food and grocery companies, especially as it cannot be attributed to particularly warm weather. For only the second time since we started tracking this question in 2010, a higher number of grocery shoppers plan to focus more on quality in the year ahead (22 per cent) than those prioritising saving money (19 per cent).
“There is further cause for optimism. Big international football tournaments are usually good for food and drink sales and this time there are three UK teams to support.”
Notes to editors
The BRC-KPMG Retail Sales Monitor measures changesin the actual value (including VAT) of retail sales, excluding automotive fuel. The Monitor measures the value of spending and hence does not adjust for price or VAT changes. If prices are rising, sales volumes will increase by less than sales values. In times of price deflation, sales volumeswill increase by more than sales values.
Retailers report the value of their sales for the current period and the equivalent period a year ago. These figures are reported both in total and on a ‘like-for-like’ basis.
Total sales growth is the percentage change in the value of all sales compared to the same period a year earlier. The total sales measure is used to assess market level trends in retail sales. It is a guide to the growth of the whole retail industry, or how much consumers in total are spending in retail – retail spending represents approximately one-third of consumer spending. It is this measure that is often used by economists. Many retailers includedistance sales as a component of total sales.
‘Like-for-like’ sales growth (LFL) is the percentage change in the value of comparable sales compared to the same period a year earlier. It excludes any spending in stores that opened or closed in the intervening year, thus stripping out the effect on sales of changes in floorspace. Many retailers includedistance salesas a component of like-for-like comparable sales.
The like-for-like measure is often used by retailers, the city and analysts to assessthe performance of individual companies, retail sectors and the industry overall, without the distorting effect of changes in floorspace.
Online (including mail order and phone) sales of non-food are transactions which take place over the internet, or via mail order or phone. Online sales growth is the percentage change in the value of online sales compared to those in the same period a year earlier. It is a guide to the growth of sales made by these non-store channels. It should be noted that online sales are still a small proportion of total UK retail sales. Estimates based on ONS figures show about 10 per cent of total UK retail sales (food and non-food) are achieved via the internet.
The responses provided by retailers within each sales category are weighted (based on weightings derived from the ONS Family Spending survey) to reflect the contribution of each category to total retail sales, thus making it representative of UK retail sales as a whole. Because the figures compare sales this month with the comparable period last year, a seasonal adjustment is not made. However, changes in the timingof Bank Holidays and Easter can create distortions, which should be considered in the interpretation of the data.
As well as receiving sales value direct from the retailers in the scheme the BRC-KPMG Retail Sales Monitor also receives food and drink sales value data from the IGD’s Market Track Scheme.
In its role as sponsor of the BRC-KPMG Retail Sales Monitor, KPMG is responsible for the aggregation of the retail sales data provided by the retailers on a weekly basis. This data consists of the relevant current week’s sales data and comparative sales figures for the same period in the prior year. The aggregation has been performed by KPMG on data for periods following 2 April 2000 and equivalent prior periods. The accuracy of the data is entirely the responsibility of the retailers providing it. The sponsorship role has been performed by KPMG since 10 April 2000 and the same for the aggregation of comparative sales figures for the period from 2 April 2000 it is not responsible for the aggregation of any data included in this Monitor relating to any period prior to 2 April 2000.
The commentary from KPMG is intended to be of general interest to readers but is not advice or a recommendation and should not be relied upon without first taking professional advice. Anyone choosing to rely on it does so at his or her own risk. To the fullest extent permitted by law, KPMG will accept no responsibility or liability in connection with its sponsorship of the Monitor and its aggregation work to any party other than the BRC.
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The British Retail Consortium (BRC) is the UK’s leading retail trade association. It represents the full range of retailers, large and small, multiples and independents, food and non-food, online and store based.
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
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