Retail sales volatile

Retail sales in the UK during May rose 3.6% on a like-for-like basis, against a weak comparative in May 2005, when sales had dropped 2.4%. The three-month trend rate of growth rose to 2.7% in May from 1.7% in April for like-for-like sales, and to 5.6% from 4.7% for total sales, reflecting the continued growth of retail space.

The warmer start to the month helped spring/summer ranges but then the cold wet second half gave sales declines in most sectors. Food sales held up, and large TVs showed excellent gains ahead of the World Cup.

With consumer confidence still weak amid concerns about personal finances, shoppers remain wary of committing to larger housing-related purchases. Kevin Hawkins, Director General, BRC said "A superficially encouraging result should be set against a weak comparative with May 2005. The modest improvement in sales reported by some retailers reflects continued discounting, and while certain products are now in demand in anticipation of the World Cup, others remain heavily dependent on price cuts. Consumer confidence remains fragile and an increase in interest rates is the last thing that either consumers or retailers need."

Overall sales were little better than in April: stronger growth in womenswear and menswear was largely offset by much slower growth in childrenswear. The warmer first half of May allowed pent-up demand for spring/summer ranges to translate into sales, but the cold wet second half of the month had a major impact, cutting back any gains achieved earlier. Women's dresses, blouses and tops, shorts and swimwear sold well on warm days but heavy rain and cold winds halted sales later in the month. Having already bought warm clothes in the winter, outerwear, trousers and knitwear did not benefit, even where stocks remained. Menswear showed a similar, though less marked, response to the changeable weather. World Cup merchandise had a good start and also helped to boost sportswear for some. Childrenswear slowed overall, but was mixed across stores with some enjoying good sales of fashion and schoolwear.

Footwear sales were no better than in April and only slightly up on a year ago. The weather had a major impact, especially on women's footwear, which once again failed to show any growth overall. The warm start to the month benefited sandals and summer casuals, but then demand dropped away when the heavy rain and cold wind set in. Then formal courts and dressy sandals did better than open-toe and ballerina pump styles. Men's footwear was less sensitive to the changeable weather, showing small gains on a year ago. Children's also held up well, with some strong sales of sandals and canvas shoes in the warm spells.