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Retail sales up despite price wars

THE total value of UK retail sales in May was up two per cent on the same month of 2013, in spite of a year-on-year fall in the food category arising from price wars, industry figures have revealed.

The survey, published today by the British Retail Consortium, showed clothing sales were strong in May, with the BRC believing warmer weather had lifted the shopping mood.

Edinburgh-based David McCorquodale, head of accountancy firm and BRC survey sponsor KPMG's UK retail sector practice, said: "The recovery is gaining pace in the retail sector, but the latest figures reveal the scale of the paradox that has emerged. While non-food retailers are seeing steady sales growth, the grocers appear locked in a race to the bottom, imposing price cut after price cut to maintain their sales volumes. This price war is hindering the retail sector's overall recovery."

The two per cent year-on-year growth in retail sales value in May was well adrift of a corresponding pace of increase of 5.7 per cent in April. Sales this April were boosted by the later timing of Easter.

Over the January to May period, year-on-year growth in UK retail sales value has averaged 2.7 per cent. The BRC has calculated that, between March and May, the value of food sales was down 0.2 per cent on the same period of last year.

It declared that this was the first year-on-year fall in food sales value in any three-month period since comparable records began in 2008, excluding Easter distortions.

BRC director general Helen Dickinson highlighted the finding that the value of non-food sales between March and May had been up 4.3 per cent on the same period of last year.

She said: "Customers took advantage of great summer fashion ranges and clothing sales had their best results since December 2011. There is also strong momentum in big ticket sales such as consoles and televisions as customers feel confident enough in the economy to make purchases that had been on hold, waiting for economic recovery.

"But there is a very clear pattern in food sales emerging where customers continue to be discerning in search of value."

Year-on-year growth in retail sales value has been consistently weaker in Scotland than UK-wide.

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