UK retail sales enter negative territory during May

Following a better than expected March and April, trading conditions weakened in May with like-for-like sales falling 1.5 per cent according to the latest edition of the BDO High Street Sales Tracker.
 
Given the current economic environment, this was a relatively strong performance and indicates that consumer spending is still holding-up surprisingly well.  Especially when considered against the upbeat prior-year comparatives that most stores were up against - May last year was strongest month of 2008 - these results are very encouraging.

Rupert Eastell, Head of Retail at BDO, said: “Despite some tentative signs that the economy is starting to improve, retailers are still finding life on the high street especially tough - particularly as concerns about unemployment continue unabated.”

“However, it’s not all doom and gloom as we’re seeing retailers who stock compelling products are still in demand. Great products, coupled with the warmer weather have meant that many retailers are continuing to outperform the poor expectations assumed at the start of the year.  Although we still believe demand may fall back again in the coming months, and would caution against calling the bottom of the market, these results bode well for the remainder of 2009,” continues Eastell.

• Fashion: -3.4%

Up against tough comparatives last year, fashion retailers saw takings decrease during May, with like-for-like sales down 3.4 per cent.  A general reduction in the level of promotional activity compared to last year, coupled with strong competition from department stores, contributed to this decrease. Footwear and formalwear were the worst performing categories, while seasonal womenswear was the best.  However, towards the end of the month those stores with a strong focus on seasonal summer ranges, gained from the excellent weather.

• Non-fashion: +5.0%

Non-fashion like-for-like sales rose by 5.0 per cent during May. Demand for luxury goods continued to be very positive, while leisure and gifting stores also saw sales improve.  Demand for small ticket gifts remained especially solid, whereas health and beauty sales have remained flat.

• Homeware: -7.2%

Homeware retailers have been struggling for many months now, with only one positive result in the last 12 months.  Like-for-like sales across most areas retreated, with big ticket purchases especially weak despite a general uplift in the level of promotional activity.

Source: BDO High Street Sales Tracker

ENDS

BDO’s High Street Sales Tracker outlines weekly like-for-like sales changes of some 70 mid-tier retailers with c10,000 individual stores across Fashion: accessories, clothing, footwear. Non-fashion: general household goods, gifts, health & beauty, leisure goods. Homewares: cookware, furniture & floor coverings, lighting, linen & textiles.

For more information, please contact Dee Crooks at BDO on 020 7893 2761 / 07815 172 051 or email dee.crooks@bdo.co.uk

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