British retail gross sales jumped sharply final month after heavy rain saved consumers away in April, official figures confirmed on Friday, in a minor enhance for Prime Minister Rishi Sunak forward of the July 4 election.
Gross sales volumes rose 2.9 % in Might, up from a revised 1.8 % fall in April, the Workplace for Nationwide Statistics mentioned.
Economists polled by Reuters had on common forecast gross sales volumes would enhance by 1.5 % in Might.
In comparison with a 12 months in the past, Might’s gross sales volumes had been 1.3 % greater, after a revised 2.3 % fall in April, however remained 0.5 % under their stage in February 2020 earlier than the COVID-19 pandemic.
The ONS mentioned yearly gross sales development may also be distorted by an additional public vacation in Might 2023 to mark King Charles’ coronation.
Lisa Hooker, a shopper markets specialist at PwC, mentioned Might’s gross sales development was much less robust than it checked out first look, as soon as the additional buying and selling day, a minimize in worker payroll taxes and an increase within the minimal wage had been taken into consideration.
“We might have anticipated a bigger enchancment in gross sales volumes,” she mentioned.
British consumers have been squeezed by excessive inflation which solely returned to the BoE’s 2 % goal final month after exceeding it for almost three years.
Common wages at the moment are rising sooner than inflation and shopper sentiment in June had recovered to its highest since November 2021, based on figures from Britain’s longest-running shopper confidence survey earlier on Friday.
The ONS mentioned gross sales volumes rose throughout most sectors final month, with clothes retailers and furnishings shops rebounding particularly strongly following poor climate in April.
The advance comes after many retailers reported that discretionary spending was beneath strain within the first quarter of 2024.
Tesco, Britain’s greatest meals retailer, final week reported a powerful first quarter. Nevertheless, sportswear vendor JD Sports activities Style not too long ago reported a drop in first quarter UK gross sales, whereas couch retailer DFS Furnishings warned on revenue.
“Though macroeconomic indicators – together with rates of interest, inflation, and wages are enhancing – it appears customers are biding their time, ready for a extra optimistic local weather earlier than loosening their purse strings,” Silvia Rindone, retail lead at EY UK and Eire, mentioned.
By David Milliken and Suban Abdulla; further reporting James Davey; modifying by William James and Sharon Singleton
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