UK retail sales down in May but better than they look
The announcement that like-for-like sales in May were down 0.8% compared to May 2008 is a disappointing headline but under the surface the situation may not be as bad as it seems. May last year was a particularly strong month and they were always going to be difficulties comparing like-for-like bearing in mind the recession has bitten further over the last few months.
The headlines also look worse when you compare a 4.6% increase in like-for-like sales in April against the relative fall in May although again there are extenuating circumstances which includes the timing of Easter this year. All in all there appears to be something of a stabilisation on the UK high street and only recently we saw the likes of Carphone Warehouse indicate a potential increase in consumer spending and overall interest.
It seems that a mixture of low confidence, concerns regarding employment and low liquidity in the UK banking sector have come together to keep consumers subdued at least in the short to medium term. In the medium to longer term, once the economy has stabilised, unemployment is under control and consumer confidence returns we should see shoppers returning to the high street although there is no hiding the fact that time it will be difficult for the UK retail sector for the remainder of 2009 at least.
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