Royal Wedding Boosted Spending Spree in the UK in May

By Northern Ireland Office via Wikimedia Commons

Last May, retailers in the United Kingdom had one of their best months in recent years as the royal wedding and warm weather enticed consumers back into the shops.

In the most recent sign that growth has picked up after a harsh first three months of this year, the health check of spending in the high street from the KPMG and the British Retail Consortium reported that the total sales were up by 4.1 percent.

A separate report that was made by Barclaycard discovered that consumer spending improved by just more than 5 percent last month. It was considered to be its fastest improvement in over a year.

However, amid some evidence that the construction sector is being affected by the series of closures of stores in the high street, Helen Dickinson, the chief executive of BRC, warned that the outlook for retailers continued to be difficult. Nearly 6,000 shops closed last year– the highest reported since the economy was recovering from the deep recession that was caused by the financial crisis during the period between 2008 and 2009 – and well-known brands such as Mothercare, House of Fraser, and Marks & Spencer are planning further store closures this year.

Dickinson stated: “Retail sales in May saw their highest growth since January 2014 as better weather and the bank holiday effect led shoppers to buy from garden furniture and summer fashion ranges; recovering some of the ground lost in April.”

She added: “Food sales also stood out, with the best single month’s performance since July 2013.”

During the past three months – which is considered to be a better guide to the underlying trend – the growth of sales weakened by 1.2 percent. Earlier in the year, spending was hit by the squeeze on consumer spending and the surprisingly severe weather that was caused by the “beast from the east.”

Dickinson stated: “Despite this more positive set of sales results, the retail environment remains extremely challenging, with trend growth still very low by historical standards.”

The UK head of retail of KPMG, Paul Martin, stated: “Two bank holiday weekends, a royal wedding and of course sunnier spells will have been the main drivers behind the apparent rebound, with both online and high street sales thankfully up overall.”

The construction industry remained to stage a modest recovery last month after bad weather earlier this year. It reduced the demand from struggling retailers and was one reason that was cited in the most recent purchasing managers survey of the IHS Markit/CIPS for the fourth drop in new orders in five months.

Last May, the reading on the index of the construction purchasing managers of IHS Markit/CIPS remained to be steady at 52.5 points against the forecasts of economists for a slight drop in activity from the previous month. An economist at IHS Markit, Sam Teague, warned that a renewed decline in new work “hinted that the recovery could prove short-lived.”

Barclaycard stated that the good weather last month had encouraged consumers to buy in-store instead of doing online shopping. Non-essential expenditure improved by 4.6 percent, the highest level of growth that was recorded in more than a year, with clothes shops, pubs, and garden centres all doing well.

The company said that spending on various experiences such as sporting events and music festivals would continue to be strong over the coming months.