Retail sales return to growth

Retail sales rebounded in May, as the sunny weather boosted sales of outdoor DIY goods and summer clothing, but shoppers are still reluctant to spend money on expensive items, according to the British Retail Consortium.

Like for like sales increased 0.8% in May, a reversal on April’s 0.2% fall and an improvement on the 0.8% slump last May.

However, despite the gains, the BRC says sales of “big ticket items” were sluggish “in the face of consumer uncertainty about job and income prospects”.

Stephen Robertson, director general of the BRC, says: “Consumer confidence has clearly improved since last year’s lows. But there’s still plenty of uncertainty, which is making customers nervous about buying expensive goods, such as furniture, despite widespread reductions.”

Retailers are hoping the World Cup will provide a further boost to sales of items including food, drink and consumer electronics. They will also be looking for positive signs in the emergency budget due at the month.

It is believed that Chancellor George Osborne will reveal further cuts in public spending in addition to the £6.2bn announced in May. It is also possible that VAT and capital gains tax could rise.

The BRC adds food sales returned to growth after April’s “Easter-distorted” fall which saw stores closed over the bank holidays.

Non-food items bought online, by phone, or by mail order were 21.9% higher than a year ago, and up from 15.9% in April.

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