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Clothing helps retail sales edge up

09:06 10 June 2014

A shopper carrying shopping bags. Photo: Dominic Lipinski/PA

A shopper carrying shopping bags. Photo: Dominic Lipinski/PA

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Retail sales edged up in May as the best month for clothing retailers in more than two years was offset by the impact of supermarket price wars.

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The latest retail sales index from the British Retail Consortium (BRC) and KPMG showed that like-for-like sales rose 0.5pc compared with a year ago, with total sales when including shops open for less than a year up by 2pc.

The survey also reported strong momentum in big ticket sales such as games consoles and televisions as customers now feel confident enough in the economy to make purchases that had been put on hold.

Clothing was the best performing category, reporting its highest growth since December 2011, while food was the lowest, reporting a decline in total terms.

Average food sales on a quarter-on-quarter basis slipped 0.2pc, as the major supermarkets - Tesco, Sainsbury's, Morrisons and Asda - cut prices to hold market share and fight off discount rivals.

This is the first time that the three-month average for food has been in negative territory since the survey began in 2008.

KPMG head of retail David McCorquodale said grocers "appear locked in a race to the bottom" to cut prices.

Mr McCorquodale added: "This price war is hindering the retail sector's overall recovery, which without the effects of these cuts would have seen like-for-like sales growth outpace inflation over the last quarter."

The Consumer Prices Index inflation rate rose to 1.8pc in April from 1.6pc in March, according to the Office for National Statistics.

BRC director general Helen Dickinson added there was "a very clear pattern" of customers searching for value in food retail.

Ms Dickinson added that summer fashion ranges and discounting helped clothing sales perform strongly.

Joanne Denney-Finch, chief executive at food research group IGD, said it would be "essential" for food retailers to capitalise on the World Cup and other summer events to boost sales.

On Friday, John Lewis said its home and electricals department saw its best week of the financial year to date, with demand for TVs in the run-up to the World Cup lifting sales by 22pc.

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