This morning’s Retail Sales Statistics for May 2017 saw a slight “mayday” as spending fell across all retail categories by 1.1% compared to April. However, there could be a rescue recovery mission in the underlying figures, which actually show an overall increase compared to 2016.
The key findings from the Retail Statistics showed:
- In May 2017, the quantity bought in the retail industry was estimated to have increased by 0.9% compared with May 2016; the annual growth rate was last lower in April 2013.
- Non-food stores were the main contributing factors to this slowdown with an annual fall of 1.2% and predominantly food stores saw the lowest annual growth since July 2013 at 0.1%.
- Month-on-month, the quantity bought was estimated to have fallen by 1.2% following strong growth in April 2017.
- The underlying pattern, as measured by the 3 month on 3 month change showed growth of 0.6% in May 2017.
- Average store prices (excluding fuel) increased by 2.8% on the year; the largest growth since March 2012.
Phil Mullis, Partner and Head of Retail and Wholesale at top-20 UK accountancy firm, Wilkins Kennedy, said: “Even though there was an overall drop in spend from the previous month, these figures do not take into consideration the Easter Bank Holiday weekend, which would have had an impact. There are also other factors, such as the increase in average store prices, which increased 0.3% compared to April 2017.
“Inflation is also creeping upwards and wage growth is not keeping pace. As consumers spend on everyday staples, they may start to cut back on discretionary spend, and again these need to be factored into the figures.
“It may not be all bad news. The three month on three month underlying pattern has actually shown an increase in spend by 1.4% and compared to May 2016 there was a 4.1% increase. However the pace of growth is slowing. As always, the winners in the retail world will be the ones who stick close to their customers and deliver the right product at the right price and in the right place.”