RSM comments on latest retail spending figures

Commenting on the latest retail sales figures for May published by the Office of National Statistics, Andrew Westbrook, head of retail at RSM said:

‘Previous data published by the British Retail Consortium suggested that the retail sales for May would be positive -  and today’s figures from the ONS didn’t disappoint. 

‘The combination of good weather, long bank holiday weekends and the general uplift in mood surrounding the Royal Wedding appears to have encouraged the British public to bring their wallets out of hibernation. 

‘The quantity of goods bought increased sharply by 3.9 per cent versus the same month last year, while the amount spent increased by 6.3 per cent over the same time period.

‘This uptick in retail spending will have provided a much-needed respite for many of the high street’s struggling retailers -  but as we’ve seen this week the fight for survival is far from over. 

‘Not all retailers are in the doldrums. The market is becoming quite polarised with well branded businesses which differentiate on price or quality continuing to perform well. 

‘However, there are challenges that are common to all retailers. As footfall declines, retailers are placing an increased focus on digitisation to try and attract and convert customers. 

‘Relationships between retailers and their landlords are also becoming more strained. Landlords are pushing back against the use of CVAs to drive down rents, not least because healthy retailers are beginning to demand reductions to match their struggling competitors. This conflict is likely to remain a feature of the market for some time to come.

‘Looking ahead, the economic picture for retailers is a little mixed. While employment rates are at a record high, the expected rise in wages hasn’t materialised, meaning household budgets are still tight for many.’