Retail sales, Great Britain: May 2015

• Continuing a sustained period of year-on-year growth, the volume of retail sales in May 2015 are estimated to have increased by 4.6% compared with May 2014. This was the 26th consecutive month of year-on-year growth, the longest period of sustained growth since May 2008 when there were 31 periods of growth

• The underlying pattern in the data, as suggested by the 3 month on 3 month movement in the quantity bought, continued to show growth for the 27th consecutive month, increasing by 0.6%. This is the longest period of sustained growth since consistent records began in June 1996

• On the month, the quantity bought in the retail industry increased by 0.2% compared with April 2015. There was growth in predominantly food stores, other non-food stores, household goods stores and petrol stations

• Average store prices (including petrol stations) fell by 2.7% in May 2015 compared with May 2014. This is the 11th consecutive month of year-on-year price falls. The largest contribution once again came from petrol stations which fell by 10.2%, the 21st consecutive month of year-on-year falling prices in this store type

• In May 2015, the amount spent in the retail industry increased by 1.8% compared with May 2014 and by 0.2% compared with April 2015. Non-seasonally adjusted data show that the average weekly spend in the retail industry was £7.1 billion compared with £6.9 billion in April 2015 and £7.0 billion in May 2014

• The value of sales made online in May 2015 decreased by 2.1% compared with April 2015 and accounted for 12.0% of all retail sales. Online sales increased by 7.4% compared with May 2014

• Revisions in this release were caused by the incorporation of late data. The earliest revisions point for current price, non-seasonally adjusted data was May 2014. More information on revisions can be found in the background notes

This bulletin presents estimates of the quantity bought (volume) and amount spent (value) in the retail industry for the period 3 May 2015 to 30 May 2015. Unless otherwise stated, the estimates in this release are seasonally adjusted.

Users are reminded that the figures contained in this release are estimates based on a monthly survey of 5,000 retailers, including all large retailers employing 100 people or more and those with annual turnover of greater than £60 million who employ 10 to 99 people.

The quality of the estimate of retail sales

Retail sales estimates are produced from the monthly business survey – RSI. The timeliness of these retail sales estimates, which are published just 3 weeks after the end of each month, makes them an important early economic indicator. The industry as a whole is used as an indicator of how the wider economy is performing and the strength of consumer spending. Results are revised for the previous 13 published periods. More information about the data content for this release can be found in the background notes.

Revisions are an inevitable consequence of the trade-off between timeliness and accuracy. The response rate in May 2015 was 60.2% of questionnaires, accounting for 93.4% of registered turnover in the retail industry. Therefore the estimate is subject to revisions as more data become available.

All estimates, by definition, are subject to statistical uncertainty and for the retail sales index we publish the standard error associated with the non-seasonally adjusted estimates of year-on-year and month-on-month growth in the quantity bought as a measure of accuracy. More information on these standard errors can be found in the background notes of this bulletin and in the quality tables (164.5 Kb Excel sheet) of this release.

It should be noted that we are continually working on methodological changes to improve the accuracy of the retail sales estimates; progress on these can be found on the ONS continuous improvement page on our website.

For different ways to access the data see the reference tables section on our website. These include:

• non-seasonally adjusted and seasonally adjusted volume and value indexes by industry

• year-on-year and month-on-month growth rates by industry

At a glance

In May 2015, the quantity bought in the retail industry (volume) increased by 4.6% compared with May 2014. The amount spent (value) increased by 1.8%. In May 2015, non-seasonally adjusted data show that the prices of goods sold in the retail industry (as measured by the implied price deflator) decreased by 2.7%. More information on how the implied price deflator is calculated can be found in section 3 of the background notes.

Amount spent in the retail industry

In the 4 week reporting period during May 2015, the amount spent in the retail industry was £28.3 billion (non-seasonally adjusted). This compares with £27.8 billion in the 4 week reporting period for April 2015 and £27.8 billion in the 4 week reporting period for May 2014.

This equates to an average weekly spend of £7.1 billion in May 2015, £6.9 billion in April 2015 and £7.0 billion in May 2014.

Figure 1 shows how the yearly growth in the 3 month average of retail sales volumes was affected by the downturn, and highlights the strong growth since 2013.

Three distinct periods emerge from Figure 1. In the years preceding the downturn, growth in retail sales volumes was strong. Between May 2006 and May 2008, the volume of sales increased by 6.3%, or at an average annual rate of 3.1%. Growth in Consumer Price Inflation (CPI), was consistently lower than in average weekly earnings over this period, meaning real earnings grew, which possibly increased the purchasing power of consumers.

However, between May 2008 and May 2013, the volume of retail sales remained broadly flat, fluctuating between periods of contraction and expansion, and as a result roughly the same volume of sales was recorded at the beginning and end of the period. This weakness is partly explained by the economic climate over this period. Growth in average weekly earnings was consistently lower than inflation, which implies that earnings fell in real terms. Real household disposable income, which includes the effect of taxes and benefits, was also broadly flat over this period. However, the value of retail sales continued to grow, increasing by 10.7% over the period, reflecting rising prices between these dates.

The third period shown in Figure 1 starts in 2013, when growth in volume terms began to increase notably, despite weak growth in disposable income and average weekly earnings continuing to grow at a slower rate than CPI. The volume of retail sales in May 2015 was 8.3% higher than it was in May 2013; corresponding to an average annual growth rate of 4.1%, substantially faster than in the years preceding the downturn. Possible explanations for the strong growth in sales despite weak earnings growth were discussed in the April 2015 retail sales release, which looked at the difference between CPI and retail store prices.

The retail industry is divided into 4 retail sectors:

• predominantly food stores (for example, supermarkets, specialist food stores and sales of alcoholic drinks and tobacco)

• predominantly non-food stores (for example, non-specialised stores, such as department stores, textiles, clothing and footwear, household goods and other stores)

• non-store retailing (for example, mail order, catalogues and market stalls)

• stores selling automotive fuel (petrol stations)

In May 2015, for every pound spent in the retail industry:

• 41 pence was spent in food stores

• 42 pence in non-food stores

• 7 pence in non-store retailing

• 10 pence in stores selling automotive fuel

Using these as weights, along with the year-on-year growth rates, we can calculate how each sector contributed to the total year-on-year growth in the quantity bought.

Figures 2 and 3 show the contribution of each sector to the quantity bought (volume) and amount spent (value) in the retail industry between May 2015 and May 2014.

In May 2015, all 4 main retail sectors saw an increase in the quantity bought (volume). The largest contribution came from the non-food stores sector.

In May 2015, 3 out of the 4 main sectors (food stores, non-store retailing and non-food stores) contributed to the increase in amount spent (value). The largest contribution came from the non-food stores sector.

Main points:

• in May 2015, all store types showed increases in the quantity bought compared with May 2014

• all store types except petrol stations showed increases in the amount spent year-on-year

• in May 2015, all store types saw falls in average store price compared with May 2014

More information on how average store prices are calculated can be found in the quick guide to retail sales (117.1 Kb Pdf) or in the background notes.

In predominantly food stores in May 2015 compared with May 2014:

• the quantity bought increased by 2.6%

• the amount spent increased by 1.0%

• average store price decreased by 1.6%

Compared with April 2015:

• the quantity bought increased by 0.6%

• the amount spent increased by 0.9%

• average store price increased by 0.1%

Figure 4 shows the longer-term picture for the quantity bought, amount spent and average price in food stores. The amount spent has increased at a strong, but consistent rate from 2005 to early 2013 and after this time has stayed relatively flat. As the amount spent is a combination of the quantity bought and price of goods, if average store prices fall then unless there is an increase in the quantity bought, the amount spent will fall.

In recent months, the quantity bought in the food sector has increased and while average store prices have fallen, the amount spent has stayed at this flat level due to this increase in the quantity bought. While the month-on-month and year-on-year increase in the quantity bought is not unusual, the level is now at it’s highest since April 2011, however, this was distorted by the Royal Wedding and extra bank holiday.

Feedback from supermarkets, which make up a large proportion of food retailers, suggests that increased sales of alcohol due to in-store promotions boosted sales in May 2015. Within the food sector, off licences and tobacconists saw a year-on-year increase of 27.7%, the highest on record.

Seasonally adjusted internet sales data are provided within this release. These seasonally adjusted estimates are published in the RSI internet tables and include:

• a seasonally adjusted value index

• year-on-year and month-on-month growth rates

Internet sales are estimates of how much was spent online through retailers across all store types in Great Britain. The reference year is 2011=100.

Main points:

• average weekly spending online in May 2015 was £791.3 million; this was an increase of 7.4% compared with May 2014 and this was the lowest year-on-year increase since November 2012

• the amount spent online accounted for 12.0% of all retail spending, excluding automotive fuel, compared with 11.5% in May 2014

• the increase of 0.8% in textile, clothing and footwear stores was the lowest year-on-year increase since records began in January 2008

Table 3 shows the year-on-year growth rates for total internet sales by sector and the proportion of sales made online in each retail sector.

Table 4 illustrates the mix of experiences among different-sized retailers. It shows the distribution of reported change in sales values of businesses in the RSI sample, ranked by size of business (based on number of employees). It shows that businesses with 10 to 49 employees saw the largest growth in the amount spent, comparing May 2015 with May 2014. Businesses with 100 and over employees experienced growth of 2.6%.

More information on the performance of the retail industry by store type and size can be found in the reference table, Business Analysis (25.5 Kb Excel sheet) . This shows the extent to which individual businesses reported actual changes in their sales between May 2014 and May 2015. The table contains information only from businesses that reported in May 2014 and May 2015. Cells with values less than 10 are suppressed for some classification categories; this is denoted by “c”. Note that “large” businesses are defined as those with 100 and over employees and 10 to 99 employees with annual turnover of more than £60 million. “Small and medium” businesses are defined as 0 to 99 employees.

The only international estimate of retail sales available for May 2015 was published by the US Census Bureau on 11 June 2015. In its advanced retail sales estimates for May 2015, the amount spent in the US retail industry, including motor vehicles and parts and food services, increased by 1.2% from the previous month and by 2.7% compared with May 2014. Total sales for the 3 months to May 2015 were up 2.1% from the same period a year ago.

The latest estimates from Eurostat for April 2015 of the volume of retail trade across the European Union increased by 0.7% in the euro area (EA19) and by 0.6% in the EU28 when compared with March 2015. Compared with April 2014, the retail sales index increased by 2.2% in the EA19 and by 2.6% in the EU28. It should be noted that an accurate comparison cannot be made as Eurostat data are calculated on a 2010 = 100 basis, while GB data are now calculated on a 2011 = 100 basis.