Revitalised UK retailers enjoy magic May as hospitality reopens

UK retail sales were buoyant in May thanks to the reopening of hospitality, coupled with the afterglow of non-essential stores returning to action.

According to research from BRC and KPMG, total sales increased by 10% in May (Yo2Y), against a decline of 2.7% in May 2019 (YoY). This is above the three month average growth of 8.5% (Yo2Y).

Helen Dickinson, Chief Executive at British Retail Consortium, says: “Pent-up demand for the in-store shopping experience, as well as the first signs of summer weather, helped retail to the strongest sales growth of the pandemic.”

Furniture and homeware sales continued to perform well as consumers were able to see and feel items in-store, while clothing and footwear saw their second consecutive month of growth due to the warmer weather and easing of social restrictions.

Dickinson flags up “a growing sense of consumer confidence, boosted not only by the widespread uptake of vaccinations and testing, but also retailers’ own significant investment in safety measures.”

“Time to truly innovate the high street model”

Large cities have, meanwhile, been hardest hit by the pandemic, with many people still working from home and footfall remaining considerably down as shoppers increasingly choose to shop local.

“Now is the time to consider what our future high streets and town centres will look like a decade from now. We must adapt to these changes, not only to build back better but also to build forward,” Dickinson adds

“With vacancy rates still rising in many parts of the country, we must reimagine how we integrate residential and commercial property, allowing us to build stronger local communities that encompass leisure, retail, services, and homes.”

“This will require retailers, property developers and local government to work together and plan city centres that cater to these changing demands and truly innovate the high street model.”

Paul Martin, UK Head of Retail at KPMG, comments: “Retailers now face an interesting few months as they assess how they best entice their customers back to stores and what the right blend of offline and online will be as spending patterns settle in a post Covid world.”

He adds: “With the prospect of the full lifting of Covid restrictions coming into force this month, there will be increased competition for share of wallet as consumers focus on those leisure and hospitality activities that have been denied to them due to lockdown.”

“It is a summer that starts with cautious optimism for many retailers, who will be hoping that the continued success of the vaccine roll-out and an improving economy will offer scope to spark a big surge in consumer spending.”