Retail sales blossom in May – but mini sales boom is unlikely to impact the election, says Parcelhero

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This article is brought to you by Retail Technology Review: Retail sales blossom in May – but mini sales boom is unlikely to impact the election, says Parcelhero.

The Office for National Statistics (ONS) has released May’s retail sales figures, which show a marked contrast with April’s downturn.

May saw a 2.9% rise in the amount we all bought and a 3.3% rise in the amount we all spent over the previous month. This was also a 1.3% increase on the same month last year, says the home delivery expert Parcelhero.

Parcelhero’s Head of Consumer Research, David Jinks M.I.L.T., says: “These figures are great news for High Street retailers, with non-food stores, such as department stores and clothing shops, benefitting the most. Their combined sales volumes rose 3.5%.

“However, it was e-commerce that took the honours last month. The value of online sales soared 5.4% in May over the preceding month and 4.1% year-on-year. The volume of non-store (mostly online) retail sales, which is the amount we all bought, also grew by a whopping 5.9% over April.

“This boom in online sales even eclipsed the growth in High Street spending and meant online sales grabbed 27.2% of all retail sales in May, more than the (revised) 26.7% online took in April.

“It’s interesting that a snap general election was announced on 22 May. Did this boost consumers’ confidence in the final third of the month? Together with this week’s news that interest rates finally fell to their target 2.2%, there seems to be increasingly positive economic news, which retailers and their delivery partners will welcome. 

“However, at this stage in the election campaign, it’s unclear that Prime Minister Sunak is reaping any rewards from the improving economic news. As we move into the summer months, retailers will be hoping that, whichever party wins the election, shoppers continue to feel increasingly confident without the fear of a return to rapidly rising household bills.

“Concerningly, both Labour and the Conservatives say they may increase business rates on e-commerce warehousing in order to fund High Street rates cuts. It’s vital any party in Government recognises that successful companies already have physical stores and distribution warehouses to support their e-commerce activities. Think M&S or Next. Cutting High Street rates by increasing warehouse rates is robbing Peter to pay Peter.

“A stable economy will also help the post-Covid realignment of the retail sector that is key to transport and storage companies’ own success. It will be those retailers with strong in-store and online sales that will ultimately triumph in a post-Covid world. ‘Parcelhero’s influential report “2030: Death of the High Street” has been discussed in Parliament. It reveals that retailers must develop an omnichannel approach, embracing both online and physical store sales.”

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