Royal wed­ding and sunny weather help boost May re­tail fig­ures

The Guardian - - FINANCIAL - Larry El­liott

Bet­ter weather brought some much­needed respite to Bri­tain’s strug­gling re­tail sec­tor last month as the hottest May on record brought con­sumers back to the high street.

The vol­ume of goods sold in shops and on­line was 1.3% up on April – com­fort­ably beat­ing pre­dic­tions in the fi­nan­cial mar­kets of a 0.5% in­crease.

The Office for Na­tional Sta­tis­tics said feed­back from re­tail­ers sug­gested that a hot, dry spell, cou­pled with royal wed­ding cel­e­bra­tions, boosted spend­ing in su­per­mar­kets and house­hold goods stores dur­ing the month.

“Tem­per­a­tures rose to above av­er­age in May, which con­trasts with the lower than av­er­age tem­per­a­tures ex­pe­ri­enced in Fe­bru­ary and March. This shift to warmer weather may have en­cour­aged con­sumers to spend later in the year”, the ONS said.

An­nual growth in re­tail sales picked up sharply from 1.4% to 1.9%, al­though the ONS said that was partly due to a weak month for con­sumer spend­ing in May 2017.

Tra­di­tional high-street re­tail­ers have been fac­ing tough trad­ing con­di­tions, with a shift to­wards on­line shop­ping ac­com­pa­nied by a squeeze on real in­comes through­out 2017 caused by the fall­ing value of the pound fol­low­ing the EU ref­er­en­dum.

Re­cent months have seen earn­ings grow slightly more quickly than prices, adding to con­sumer spend­ing power.

In the three months to May – a bet­ter guide to the trend than one month’s data – re­tail sales vol­umes rose by 0.9%. The lat­est three-month pe­riod in­cludes both the weak­ness caused by the “beast from the east” cold snap in early March and the more re­cent bounce back in con­sumer spend­ing.

Sa­muel Tombs, of Pan­theonMacro, said: “The jump in re­tail sales in May has all the hall­marks of a weath­er­re­lated blip, rather than a sus­tain­able pick-up in spend­ing. Over­all growth was boosted by sharp in­creases in sales of cloth­ing, sport­ing goods and gar­den items, up 1.7%, 3.3% and 6.2% mon­thto-month, re­spec­tively.”

While re­tail­ers are hope­ful that the World Cup will en­cour­age spend­ing in June and July, the pick-up has come too late to pre­vent al­most 6000 store clo­sures dur­ing 2017.

Fash­ion re­tailer N Brown, owner of brands in­clud­ing Ja­camo and Sim­ply Be, be­came the lat­est high street ca­su­alty yes­ter­day. The com­pany said it plans to close all 20 of its UK stores, with the loss of 270 jobs.

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