1. Main points

  • In May 2017, the quantity bought in the retail industry was estimated to have increased by 0.9% compared with May 2016; the annual growth rate was last lower in April 2013.

  • Non-food stores were the main contributing factors to this slowdown with an annual fall of 1.2% and predominantly food stores saw the lowest annual growth since July 2013 at 0.1%.

  • Month-on-month, the quantity bought was estimated to have fallen by 1.2% following strong growth in April 2017.

  • The underlying pattern, as measured by the 3 month on 3 month change showed growth of 0.6% in May 2017.

  • Average store prices (excluding fuel) increased by 2.8% on the year; the largest growth since March 2012.

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2. Statistician’s comment

Commenting on today’s official retail figures, Ole Black, ONS Senior Statistician said:

“The year-on-year growth in the quantity bought for retail sales in May 2017 was at 0.9%. We have not seen lower growth on the year since April 2013. Increased retail prices across all sectors seem to be a significant factor in slowing growth.”

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3. Things you need to know about this release

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the period 30 April 2017 to 27 May 2017. Unless otherwise stated, the estimates in this release are seasonally adjusted.

The Retail Sales Index (RSI) measures the value and volume of retail sales in Great Britain on a monthly basis. Data are collected from businesses in the retail industry and the survey’s results are used to produce seasonally adjusted monthly, quarterly and annual estimates of output in the retail industry at current price and at chained volume measures (removing the effect of inflation). Unless otherwise stated all estimates included in this release are based on seasonally adjusted data.

The RSI is a key economic indicator and one of the earliest short-term measures of economic activity. It is used in the compilation of the national accounts and widely used by private and public sector institutions, particularly by the Bank of England and Her Majesty’s Treasury to assist in informed decision and policy making.

Summary information can be found in the Summary Quality and Methodology Information document.

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4. Main figures

Table 1 shows the main retail sales growth rates for all retailing for both the value and volume of sales in May 2017.

Table 1 shows that estimates of retail sales in May 2017 decreased when compared to the previous month, while longer term comparisons shows growth for both the quantity bought and amount spent. Figure 1 and 2 help explain the long term picture within the retail industry.

Amount spent and quantity bought

When compared with May 2016, the amount spent (value) in the retail industry increased by 4.1% and the quantity bought (volume) increased by 0.9%. The volume (quantity bought), excluding fuel, was the lowest year-on-year growth since April 2013 at 0.6%.

Increases in average store prices may explain this slowdown. Food stores saw the biggest increase in prices since November 2013 and non-food stores the biggest increase since October 2011.

As seen with the implied price deflator in Figure 1, there was a steep increase in the average store price for all sectors between May 2016 and May 2017, with non-food stores increasing at a greater rate than other sectors. This was following a period of decline in average store prices from 2014 following rises from 2010 to 2013. The volatility in the implied deflators was mainly due to seasonal effects.

Figure 2 shows the underlying pattern for the quantity bought, amount spent and average store prices for all retailing excluding fuel, as suggested by the 3 month on 3 month movement.

Since May 2013, the amount spent and quantity bought have both shown a steady increase along with falling average store prices. Both the value and volume series flatten in the 3 months to May 2017 following a slight decline, which coincides with increases in average store prices.

Further breakdowns in the quantity bought have shown that non-food stores showed the weakest growth in the 3 months to May 2017 at 0.2%.

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5. Focus on predominantly non-food stores

In May 2017, retail sales in non-food stores showed their first year-on-year decrease since December 2015. We can estimate how each sector contributed to the total year-on-year growth in the amount spent and quantity bought in non-food stores using the following weights.

In 2016, for every pound spent in non-food stores:

  • 21 pence was spent in department stores
  • 28 pence was spent in textile, clothing and footwear stores
  • 20 pence was spent in household goods stores
  • 31 pence was spent in other non-food stores

All main sub-sectors with the exception of textile, clothing and footwear stores, showed decreases in the quantity bought. The largest contribution to the decline came from household goods stores. In terms of the amount spent, negative contributions by household goods stores and department stores were offset by a large increase in textile, clothing and footwear stores and a smaller increase in the amount spent in other goods stores.

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6. Year-on-year contribution, total retail

In May 2017 compared with May 2016, the value of sales increased by 4.1% with growth across all sectors. The volume of sales increased by 0.9% with growth in non-store retailing partially offset by a decrease in non-food stores.

Over the last 12 months, all main retail sectors except non-food stores saw increases in the quantity bought and amount spent. The quantity bought in food stores showed little change while the amount spent increased due to the increases in average store prices in this sector.

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7. Month-on-month contribution

The monthly picture, as seen in Figure 5, shows that all main retail sectors except petrol stations saw decreases in the quantity bought (volume) and the amount spent (value). The largest contributions to the decrease in both the quantity bought and amount spent came from non-food stores.

Compared with April 2017, May 2017 has shown decreases in the quantity bought and amount spent across all store types except fuel stores.

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8. What’s the story in online sales?

Internet sales are estimates of how much was spent online through retailers across all store types in Great Britain.

Table 4 shows the year-on-year growth rates for total internet sales by sector and the proportion of sales made online in each retail sector.

In May 2017:

  • average weekly spending online was £1.1 billion; an increase of 14.4% compared with May 2016
  • the amount spent online accounted for 15.9% as a proportion of all retail spending, excluding automotive fuel, compared with 14.3% in May 2016
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10. Quality and methodology

Our Monthly Business Survey (MBS) for retail sales measures output from the retail industry in Great Britain. It samples 5,000 businesses, with all businesses employing over 100 people or with an annual turnover of more than £60 million receiving an online questionnaire every month.

Further qualitative data or information and summary tables can be found in the attached datasets. This includes data on:

  • response rates
  • standard errors
  • revision triangle
  • distribution analysis

The Retail sales Quality and Methodology Information document contains important information on:

  • the strengths and limitations of the data and how it compares with related data
  • uses and users of the data
  • how the output was created
  • the quality of the output including the accuracy of the data
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Contact details for this Statistical bulletin

Rhian Murphy
retail.sales.enquiries@ons.gsi.gov.uk
Telephone: +44 (0)1633 455602