UK retail sales drop by most on record in May: survey

[LONDON] UK retail sales declined by the most on record in May, with sluggish growth in online sales and Brexit-related uncertainty taking a toll.

Total sales fell by 2.7 per cent, the biggest drop since at least 1995 when excluding any distortions caused by the timing of Easter. While some of the drop can be accounted for by comparing to last year - when sales were boosted by sunshine, the World Cup and a royal wedding - political and economic uncertainty played a significant role, the British Retail Consortium (BRC) and KPMG said. On a like-for-like basis, sales decreased by 3 per cent from a year earlier.

Online sales of products apart from food grew just 1.5 per cent, an all-time low, the BRC reported. On a three-month basis, sales of non-food items in stores dropped 2.7 per cent.

The figures reinforce a gloomy picture faced by UK retailers. While consumers have accounted for much of the economic growth since the UK's vote to leave the European Union, well-known companies on the British high street have struggled in recent months. Celebrity chef Jamie Oliver's UK restaurant business slid into insolvency last month, and department store Debenhams is planning to close as many as 22 stores next year.

"The risk of further job losses and store closures will only increase," said Helen Dickinson, chief executive of the BRC. "With retail conditions the toughest they have been for a decade, politicians must act to support the successful reinvention of our high streets and local communities."

Separately, Brexit helped push down the number of foreign direct investment (FDI) projects in the UK last year by 13 per cent, EY said. Still, Britain had more FDI projects than any other European country.

BLOOMBERG