Little good news in BRC's May spending report as comparisons prove tough
May was a bad month for UK retailers with the latest British Retail Consortium report showing a year-on-year fall of 2.7%. If you exclude the impact of Easter's regular calendar shifts, that was the biggest drop since BRC records started way back in 1995.
Was it quite the bad news it seemed? Perhaps not. Sales had been up 4.1% a year ago as blisteringly hot weather, a massive royal wedding and looming sports mega fixtures all provided a boost. Most of that didn’t help the fashion sector that much, although summer clothing and accessories were in demand early in the season.
But even though some kind of drop would have been expected this time, the figures still don’t look good. And taking the three-month average up to May, sales increased only by 0.2%, which was their weakest growth in more than two years.
On a like-for-like basis, the May figures were even worse with a 3% fall, the biggest drop since late 2008 (again, excluding those Easter anomalies). And fashion is unlikely to have benefited much due to the changeable weather that the UK has been seeing.
It's all particularly worrying for the world’s fifth-largest economy as relative strength in consumer spending has helped to counteract some of the more negative effects that have come in the wake of the Brexit vote.
We usually get a much clearer picture of monthly spending, including how clothing shops and department stores have done, from the regular Barclaycard spending index. But the company didn't publish one this month as it's adjusting the way it reports spending.
But it did say that 44% of respondents in a survey, expect Brexit to dent their household finances. Again, this was another example of the picture maybe not being as bad as it looked on the surface. That's because some 70% said they’re still confident about their finances.
And with 30% less likely to take foreign holidays this year, that could boost spending in UK coastal towns. Those towns would have got a boost last year because of the good weather and will be looking to generate as much business as they can in 2019, despite generally cooler temperatures.
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