Brexit uncertainty is driving a significant drop in UK consumer spending – with retail sales in May seeing “the biggest decline on record,” according to new data.
The latest BRC-KPMG Retail Sales Monitor shows total sales fell by 2.7% year-on-year for the four week period ending 25 May. This compares with an increase of 4.1% in the same month last year, and stripping out Easter distortions marked the worst drop since the BRC began recording figures in January 1995.
Like-for-like sales were down 3% compared to the same period last year, when they rose 2.8%. Excluding Easter distortions caused by Easter falling in different months in subsequent years, this was the biggest like-for-like drop since December 2008.
Sales of non-food items were down 2.7% on both a total and like-for-like basis, while non-food retail sales slipped 1.1%, again on a like-for-like and on a total basis.
“With the biggest decline in retail sales on record, the risk of further job losses and store closures will only increase,” says BRC chief executive Helen Dickinson.
“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.”
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By GlobalDataPaul Martin, UK retail partner at KPMG, adds: “April may have provided retailers with some light reprieve thanks to Easter, but May’s staggering fall of 3% like-for-like is a stark reminder of the industry’s ongoing issues, which for many require urgent attention.
“We are of course comparing this month’s growth against a stellar May in 2018, but even the 3-month average – which softens the monthly volatility – demonstrates that achieving growth in retail remains a real struggle.
“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.”
