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Rainy May dampens retail growth

Bad weather prompted the poorest growth in high street sales for six months in May, the latest retail sales monitor from the British Retail Consortium (BRC) and accountancy firm KPMG shows.Monthly growth fell from 3.6 per cent in April to 1.8 per cent in May, lower than the average for 2006. Clothing and footwear, as well as DIY and gardening products, suffered especially badly from the washout.Kevin Hawkins, director general of the BRC, comments that although the unseasonally bad weather had an impact recent interest rate hikes will also have kept potential customers' wallets and purses firmly in their pockets."Many of our members believe that the cumulative effects of the recent rate increases are now beginning to show up in these figures," he said."The Bank should think twice before putting up rates again in the near future."As a result of the May fall the three-month like-for-like growth rate slipped from 3.3 per cent to 2.8 per cent, sparking concern that recent hikes are only now beginning to filter through to consumers on the ground.Despite the overall slips the food and drink sector, together with toiletries and cosmetics, performed well, but Helen Dickinson, head of retail at KPMG, has pointed to a new cloud on the horizon for shopkeepers."All in all, the results for May - and those for April for that matter - are below the trend of the first quarter of the year and represent the beginning of a lower growth phase as the comparatives become tougher and the outlook less favourable," she said.

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