The latest BRC-KPMG Sales Monitor has found that retail sales showed their "biggest decline on record" in May, driven by good weather and strong comparatives.
On a total basis, sales decreased by -2.7% – excluding Easter distortions, this was the worst decline since this record began in January 1995. However, this was against an increase of +4.1% in May 2018, itself a four-year record. UK retail sales decreased by 3.0% YoY on a LFL basis, the steepest LFL decline since December 2008 (again, excluding Easter distortions).
The rate of non-food online penetration increased from 28.2% in May 2018 to 30.3% last month.
As a category, furniture fared far better YoY, as attention turned to home improvements over the bank holiday weekends.
Paul Martin, UK head of retail, KPMG, says: “The bank holiday weekends have given rise to the added interest in furniture and homewares, as shoppers set about making home improvements. However, the weather did little to convince fashion-minded shoppers to refresh their seasonal wardrobes.
“The extremely low growth online is real cause for concern, especially with almost a third of all non-food sales today being made online. This trend has continued to manifest itself over the last year and requires real focus from the retail community.”
BRC chief executive Helen Dickinson OBE comments: “With the biggest decline in retail sales on record, the risk of further job losses and store closures will only increase. While May 2018 offered almost unbroken sunshine, topped off by the run-up to the World Cup and the marriage of Meghan and Harry, May 2019 delivered political and economic uncertainty. Food sales dropped for the first time since June 2016, with further declines in clothing, footwear and outdoor goods.
“With retail conditions the toughest they have been for a decade, politicians must act to support the successful reinvention of our high streets and local communities. Business rates remain a barrier, preventing many retailers from investing in their physical space. We have a broken tax system, which sees retailers paying vast sums of money regardless of whether they make a penny at the till, and yet the Government is failing to act. The legislation is falling behind the technological revolution.”
