BRC: LFL retail sales increased by 1.8% in May

UK retail sales values were up 1.8% on a like-for-like basis from May 2012, when they had increased 1.3% on the preceding year. On a total basis, sales were up 3.4%, against a 3.4% increase in May 2012.

Total growth of 3.4% was above the 3-month average of 2.3% and the long-term 12-month average of 2.5%.

Furniture and Flooring was the best-performing category for the first time since January 2011.

Online sales were up 11.0% compared with May 2012, when they had risen by 12.4%.

Helen Dickinson, Director General, British Retail Consortium, said: "Retailers pulled off a good result in May despite contending with topsy-turvy temperatures and continued economic difficulties. The first month since February to be free of Easter timing distortions showed positive total growth in every category and overall growth well above the twelve-month average.

"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."

David McCorquodale, Head of Retail, KPMG, said: "While sales didn't soar through the roof, this is still a very creditable performance from UK retailers. Remember, these are "back to basics" sales that haven't been artificially boosted by one-off factors like Easter or last year's Jubilee. Promoting the right product at the right price made the difference in May.

"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.

"Whilst growth in Food was much in line with inflation, the categories of Furniture and Flooring, Other Non-Food and Childrenswear fared best. Electricals, still impacted by the effect of Comet, performed strongly and gardening and DIY fared better on the dry days. In the fashion world, consumers appear to have accepted the fact that summer may not involve days on end of glorious sunshine and have slowly succumbed to replenishing their wardrobes.

"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."

Source : Helen Dickinson - BRC
www.brc.org.uk/brc_news_detail.asp?id=2454