June 8, 2020 / 11:12 PM / a month ago

UK retailers report smaller drop in annual sales in May

LONDON (Reuters) - British retailers reported a sharp fall in annual sales last month, but less of a decline than in April, after some COVID-19 restrictions eased and more shoppers went online, industry data showed on Tuesday.

FILE PHOTO: A “Welcome back” sign and hand sanitizer is seen at a Zara shop in Oxford Street, London, following the outbreak of the coronavirus disease (COVID-19), London, Britain, May 26, 2020. REUTERS/John Sibley

The British Retail Consortium said total retail spending at its members - mostly large chains - was 5.9% lower than a year earlier, compared with a record 19.1% drop in April, when almost all non-essential stores were closed.

Last month’s fall was still the second-biggest since the survey started in 1995, and the BRC said sales in May 2019 had been weaker than normal too.

The figures fit with other survey data that has shown some business recovery since April when coronavirus lockdown restrictions had their greatest effect.

Samuel Tombs, economist at Pantheon Macroeconomics, said the figures pointed towards a 15% monthly rise in the official measure of retail sales for May, after they dropped a cumulative 18% over the previous two months.

“Consumers seem to have loosened their purse strings, having only spent money on essential items in April, while retailers appear to have ironed out some initial teething problems with their online operations,” he said.

Online non-food spending rose by a record 60% on a year earlier - though the BRC said this did not necessarily mean customers would flock back to the high street when non-essential stores are allowed to reopen on June 15.

“Weak consumer confidence and social distancing rules are likely to hold back sales,” BRC chief executive Helen Dickinson said.

Payments company Barclaycard said its broader measure of consumer spending, based on transactions on around half of Britain’s credit and debit cards, showed a 27.7% annual fall compared with a record 36.5% drop in April.

Tuesday’s figures showed continued strong sales growth at supermarkets, and a rebound in spending at garden centres and home improvement stores, which reopened last month and saw sales down just 3% on a year ago, Barclaycard found.

Restaurants and cafes, which reported a 79% fall in revenue in April, said sales in May were down 70% on a year earlier, as some offered more takeaway and delivery services.

Reporting by David Milliken; editing by Andy Bruce and Barbara Lewis

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