Retail sales slump in May despite relaxed lockdown restrictions

Total retail sales dropped 5.9% in May, compared to a 1.9% decline in the same month of the previous year, according to the BRC-KPMG retail sales monitor.

While this marks a slight improvement on April, when sales declined 19.1%, this was still the second-worst decline on record. The fall was less steep than the three-month average decline of 9.4% but below the 12-month average decline of 2.6%.

Like-for-like sales in May, with figures excluding non-essential stores still mandated to close by the government but including online sales, show a 7.9% increase, largely driven by online.

In-store, sales of non-food items declined 50.3% on a total and 21.9% on a like-for-like basis in the three months to May 2020, far below the 12-month average decline of 14.8%.

By contrast, food sales increased 8.7% on a like-for-like basis and 5.6% on a total basis in the three months to May, meaning food was in growth year on year for May.

Online non-food sales increased by 60.2% in May compared to 4.4% in the same month in 2019. Consequently, online non-food penetration grew from 31.4% in May 2019 to 61.9% this May.

BRC chief executive Helen Dickinson said: “Sales in May demonstrated yet another month of struggle for retailers across the country, despite an improvement on the previous month.

“Nonetheless, as the sun came out and restaurants lay dormant, food sales rose with consumers taking to their local parks for beers, BBQs and picnics. Clothing and beauty sales improved slightly on April as people left their homes to meet outside with friends and family.

“While the month showed record growth in online sales, many retailers will be anxious to see whether demand returns to our high streets when non-essential shops reopen from June 15. Weak consumer confidence and social distancing rules are likely to hold back sales.

“Furthermore, there are concerns that if government support is withdrawn too quickly, shops and businesses will not survive. Until the situation improves, retailers urgently need support on rents and negotiations with their landlords as high fees could force some physical retailers to shut for good.”

KPMG UK head of retail Paul Martin added:  “The disparity between different types of retailers and categories continues, with clear divides between essential and online versus non-essential and physical. Sales of computing equipment, toys and other household goods remained strong – especially online – with home-working and entertainment firmly at the forefront of consumers’ minds.

“Food and drink also performed well; no doubt encouraged by warmer weather and May’s bank holidays. By contrast, many non-essential categories – especially fashion – continued to attract limited demand which will increase the pressure on them in the coming months.”