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Warmer weather boosts retail expenditure in May


Retail sales bounced back in May as warmer weather encouraged consumers to spend more both online and on the high street. The Office for National Statistics noted that the quantity of retail sales rose by 0.9% from April and is up 6% on the same time last year.

An online sales growth of 17% year-on-year was recorded in May, the highest increase since June 2015 according to the IMRG Campgemini eRetail Sales Index.  Within the ecommerce division, the Index also reported its highest month-on-month growth rate between April and May, the greatest increase for more than ten years. Average basket value rose from £78 in 2015 to £81 in 2016.

In separate figures, the ONS added that the value of online sales gew by 21.5% year-on-year and 6.4% on April.

IMRG further reported that online garden sector sales soared by 55% year-on-year following a 27% year-on-year fall in May 2015. This was in part a result of hotter temperatures, which also aided clothing sales which rose by 24% on last year - the highest annual growth in nearly three years.  

Results suggest that the warmer weather brushed aside EU uncertainties and encouraged greater spending.

Spending via smartphones outperformed tablet sales with a growth of 79% and 5% respectively.

 “It was great to see the Index recording a solid performance for online retail in May 2016, up by eight per cent on an indifferent April 2016 performance and up 17% on the year.  The country experienced record temperatures in May and this was reflected in the performance of the fashion and garden sectors, which both recorded significant growth" said Bhavesh Unadkat, Management Consultant in Retail Customer Engagement Design, Capgemini . 

 “Uncertainty around the EU referendum doesn’t appear to have had any impact on the UK e-retail sector, with the latest results from the IMRG Capgemini Index revealing strong growth in online sales during May.  It seems the fine weather last month helped boost online clothing sales, with annual growth reaching the highest rate observed in three years, while the garden sector saw a much-needed return to growth after 14 consecutive months of decline, with sales surging 55% compared with May last year" added Tina Spooner, Chief Information Officer at IMRG .

“Year-to-date, online sales have grown 14.5%, well ahead of our 11% growth forecast for 2016, while sales via mobile devices continue to grow at twice the overall market rate.”

Nonetheless, EU uncertainties still remain and could cause retail spending to decline.

"Should the UK vote to leave the EU in next Thursday's referendum, the strong suspicion is that consumer spending would be severely pressurised for some time as a consequence of increased uncertainty, likely higher unemployment and squeezed purchased power" IHS Global Insight said.

Published on Friday 17 June by Talya Misiri

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