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UK retail LFLs rise 1.8% in May

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UK retail like-for-like (LFL) sales rose 1.8 per cent last month despite unpredictable weather patterns causing difficulties for retailers, data released today reveals.

On a total basis, sales increased 3.4 per cent compared with the same period last year, according to the British Retail Consortium (BRC)-KPMG Retail Sales Monitor, as every category saw a boost in sales, led by furniture & flooring.

For the first time since January 2011, furniture & flooring was the strongest performing category, emphasising a resurgence within the housing market though price promotions and discounts also drove sales.

Helen Dickinson, Director General of the BRC, explained: “May was a month of two halves for weather, meaning that retailers had to stay one step ahead when planning their promotional activity.

“The signs are that temporary discounts and offers worked well to tempt shoppers into stores and clear some of the stock that had been slow to sell during the preceding months.

“This strategy paid off particularly well for furniture and flooring, May’s best-performing category.

“Meanwhile, seasonal fashions returned to form when sunshine set in early in May, but growth slumped with temperatures in the second half of the month.

“The signs are that retailers read conditions well in May and adapted their offer accordingly.

“Customers are still price-conscious but responding well to good deals, especially for big-ticket items.

“But volatile economic conditions mean that this will remain a delicate balancing act for some time to come.”

May’s total growth was above the three-month average of 2.3 per cent and the long-term 12-month average of 2.5 per cent, as total food sales climbed 2.8 per cent while total non-food sales increased 1.9 per cent.

While food growth remained inline with inflation, non-food and childrenswear sales fared best while electricals performed strongly as the impact of Comet’s closure continued to be felt by rivals.

Meanwhile, online sales grew 11 per cent compared with May 2012, when they rose 12.4 per cent, and David McCorquodale, Head of Retail at KPMG, said that such positive results should be welcomed given that sales were now artificially boosted by events such as Easter or last year’s Jubilee.

He added: “To some extent retailers had their bacon saved by online sales, underlining the growing importance of the digital channel.

“Online sales growth helped to counter variable performances on the high street as many chose to take advantage of the same promotional offers from their sofas.

“Consumers remain highly sensitive about price and retailers are increasingly using promotional activity to drive footfall or the online equivalent.

“Just how much margin is being given away to boost sales is yet to be seen in the retailers’ accounts but, on the surface, these promotions seem to be working.”

Published on Tuesday 04 June by Editorial Assistant

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