Good news for the UK economy as retail sales rebound 2.9%

By:
on Jun 21, 2024
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  • The United Kingdom received heartening figures from its monthly retail sales figures today.
  • UK shoppers are spending again, as sales volumes surged by 2.9% in May, following a fall of 1.8% in April.
  • The figure implied good things for both the UK beating inflation and the English economy.

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This morning, the Office for National Statistics (ONS) reported that the United Kingdom’s retail sales for May 2024 climbed by close to 3% – thanks in part to the weather.

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Spending heated up dramatically for the nation last month – which the Met Office climate summaries reported as the warmest May on record, in a series going back to 1884.

Spending up by almost 3%

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According to the ONS report, which covered UK sales from 28 April to 25 May 2024, retail sales volumes surged by 2.9% in May, following a fall of 1.8% in the previous month (the final figure, revised from an initial estimation of a fall of 2.3%).

Sales volumes rose across most sectors, with clothing retailers and furniture stores rebounding following poor weather in April.

This morning’s ONS figures exceed expectations, to say the least. Broadly, markets were anticipating a reading of 1.8% for May – more than 1% lower than what they got.

Quarterly sales figures

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More broadly, sales volumes rose by 1.0% in the 3 months to May 2024, when compared with the previous quarter.

However, they fell by 0.2% year over year, when compared with the 3 months leading up to May 2023.

Over the year to May 2024, volumes rose by 1.3%, and were 0.5% below their pre-pandemic level in February 2020.

Inflation beaten in UK?

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Recently, it was reported that the UK reached the Bank of England’s (BoE) target of 2% in May.

Today’s ONS report also, arguably, brought more evidence that inflation is being beaten in the UK.

According to the ONS:

Our Consumer price inflation UK May 2024 bulletin reported that prices of furniture and household goods fell by 1.8% in the year to May 2024. This was the lowest annual rate since December 2000.”

Today’s retail sales data, too, backed this up. Non-food stores sales volumes (including categories like department, clothing, household, and other non-food stores) rose by 3.5% in May 2024.

Higher temperatures boost clothes, furniture and recreation

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“Within the broad non-food stores category, there was strong monthly growth for clothing and footwear retailers, furniture stores, and sports equipment, games and toys stores,” said the ONS.

This was the largest monthly rise since April 2021, and also represented a dramatic turnaround from the fall of 3.0% during April 2024.

“These retailers reported improved footfall, better weather, and the impact of promotions,” they added, potentially due to the promise of warmer temperatures and summer holidays.

Online sales surge

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However, online shopping prospered too.

Sales for non-store retailers (primarily consisting of online retailers) rose by 5.9% for the month.

“This was the largest monthly increase and index level [for online sales] since April 2022,” said the ONS on the data, adding that: “commodity breakdown data indicated that the increase in May 2024 was because of strong clothing and other non-food sales.”

GBP UK Economic Inflation