MNI REALITY CHECK: UK May Sales Could Spring Upside Surprise

--Although from a low base, UK retails sales should see strong M/M bounce

By Laurie Laird

     LONDON (MNI) - UK retail sales could exceed growth expectations in May,

with industry insiders suggesting a healthy rebound in grocery sales and

steadier performance from non-food stores after April's carnage.

     City economists forecast a 6.5% jump in sales between April in May, after a

record-shattering 18.1% plunge in April, but many at the coal face of retailing

report a more robust shopping scene.

     Here are the key points from their comments:

     **Supermarkets -- which account for 38% of total sales -- are likely to

rebound from the biggest-ever 4.1% m/m plunge in April.

     **Clothing sales are unlikely to repeat the 50% fall suffered in April,

raising the possibility of a slight month-on-month rise in a sector comprising

over 11% of the retail sales index.

     **Internet sales accelerated from already-elevated levels recorded in

April, with transactions up by over 30% on May of last year.

     **Retailing experts remain pessimistic about business over the medium term,

with many businesses unable to meet quarterly rent payments due later this

month.

     FRASER MCKEVITT, KANTAR:

     "People have been working their way through their store cupboards over the

past couple of months and some will now be spending a bit more on each visit to

the supermarket to replenish supplies."

     SUSAN BARRAT, CHIEF EXECUTIVE AT IGD

     "UK grocery retailers substantially benefitted from the two bank holidays

and the sunniest month on record. This, combined with the start of lockdown

easing, has seen more people keen to mark each occasions with BBQs and picnics."

     ANDY MULCAHY, STRATEGY DIRECTOR AT IMRG

     "April was the strongest month [for internet sales] in 10 years; May was

the strongest in 12 years and June is similar story ... Clothing has been

creeping up a bit in recent weeks, but footwear has not."

     HELEN DICKINSON, CHIEF EXECUTIVE AT THE BRITISH RETAIL CONSORTIUM:

     "Clothing and beauty sales improved slightly on April, as people left their

homes to meet outside with friends and family ... Office supplies, fitness

equipment and bicycles all performed well."

     PAUL MARTIN, UK HEAD OF RETAIL AT KPMG:

     "Sales of computing equipment, toys and other household goods remained

strong -- especially online -- with home-working and entertainment firmly at the

forefront of consumers' minds."

     ANDREW GOODACRE, CHIEF EXECUTIVE AT INDEPENDENT RETAILERS' ASSOCIATION

     "It will be a real challenge for retailers large and small to meet their

quarterly rental payments ... Eighty percent of our members have tried to

negotiate a way forward ... and 60% of landlords said 'no.' "

     **UK May retail sales to be published July 19 at 0700BST

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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