UK shop sales plunge again last month; paints gloomy picture for industry

UK retail sales plunged in May, reinforcing a gloomy picture for the industry that’s seen a number of high-profile businesses run into trouble.

Industry figures show total sales fell 2.7% from a year earlier, the biggest drop since at least 1995 when excluding Easter distortions. While some of that relates to strong figures a year earlier, when sales were boosted by sunshine, a royal wedding and the buildup to the football World Cup, political and economic uncertainty also played a big role, the British Retail Consortium said.

Its chief executive Helen Dickinson said the poor figures increase the risk of further job losses and store closures. Troubled retail empire Arcadia, which owns Topshop and Miss Selfridge has proposed closing 23 stores in the UK and Ireland.

Pressure from online retailers, particularly Amazon, is also taking a toll. Outdoor & Cycle Concepts, which owns sports and bicycle stores, is also planning to shut some outlets, while electronics chain Maplin has collapsed. Ms Dickinson said the UK government must respond, citing a tax system that sees retailers paying “vast sums of money regardless of whether they make a penny at the till”.

Meanwhile, German institute Ifo said its new index shows the country’s digital industry, which includes telecom makers and retailers, were doing ‘splendidly’. “One thing that stands out is that companies have been looking at the future with more caution for a few months now. At the moment, the situation is better than the mood,” Ifo said.

Bloomberg and Irish Examiner