14 June 2018
This morning’s May 2018 retail sales revealed significant growth compared to April 2018, following several months of anaemic increases, thanks, in part, to better weather and the Royal Wedding. However, retailers need to do more to maintain that growth if they are to survive in these changing times.
The key findings from the Retail Statistics showed:
- In May 2018, the quantity bought in the retail industry increased by 1.3% when compared with April 2018 with growth across all main sectors.
- Feedback from retailers suggested that a sustained period of good weather and Royal Wedding celebrations encouraged spending in food and household goods stores in May.
- The quantity bought saw a sharp increase to year-on-year growth in May at 3.9% when compared with April at 1.4%; possibly due to a combination of warm weather and slow year-on-year growth in May 2017 at 0.8%.
- Non-store retailing showed strong growth in the quantity bought when compared with the previous year at 16.2%, the previous month at 4.5% and in the three months to May at 4.9%.
- Online spending for food, department and clothing stores continued to increase, achieving new record proportions of online retailing in May at 5.8%, 17.4% and 17.6% respectively.
- The proportion of online spending in clothing stores has grown at a much faster rate in the last 14 months, from 14.7% in March 2017 to 17.6% in May 2018.
Phil Mullis, Partner and Head of Retail and Wholesale at top-20 UK accountancy firm, Wilkins Kennedy, said: “It was pleasing to see a good amount of growth in the retail sector, thanks in part to the royal wedding and an improvement in the British weather. However, this is not a sustainable way to maintain growth and more needs to be done to make sure retailers are keeping up with the fundamental change that is going on in the industry.
“It’s particularly interesting that online retailing continues to grow, but that is hardly surprising given that footfall overall is decreasing. The times are changing in the retail sector and many are already adopting their strategies to encompass less high street stores to focus on a stronger online offering. We only need to look at the headlines to see retailers such as New Look, House of Fraser and M&S cutting back on their store estate. Other brands, such as Ted Baker, continue to thrive as they have the right amount of stores to cater for footfall, yet also heavily target their online shoppers. Those retailers who adopt a unified retail strategy, with customers at the core of their proposition, will be those who should thrive.
“Looking forward to June, let’s hope the good weather continues and that the World Cup and a positive England performance brings improved consumer confidence and some further growth in the sales figures.”