Discounts attract customers to store

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Heavy discounting and promotions at department stores helped to pull in cash-strapped consumers and push up retail sales last month, official figures show.

Retail sales volumes increased 1.4 per cent in May, following a revised 2.4 per cent drop in April, the Office for National Statistics (ONS) said yesterday. City analysts had expected a rise of around 0.8 per cent.

The increase was driven primarily by a 6.2 per cent surge in fuel sales, as March’s fuel strike threat continued to have an impact, but there was evidence that a fall in prices at department stores also lifted volumes. Stripping out the impact of fuel, total retail sales volumes increased by 0.9 per cent.

The rate of inflation has fallen throughout 2012, from a 5.2 per cent peak last September to 2.8 per cent in May, as weak economic growth has weighed on company’s pricing power.

Total retail sales plunged in April as heavy rain hit clothing and footwear retailers.

A bright spell of sunshine later in May had a small impact on the clothing sector, the ONS said, which rebounded after a dismal April to record 3.4 per cent growth in sales volumes.

Non-specialised stores – or department stores, such as John Lewis and House of Fraser – saw volume growth of 0.8 per cent on the month and 11.3 per cent when compared with May last year.

The ONS estimates that the price of goods in department stores on average have fallen two per cent in the past 12 months.

Discounting and promotions were also seen in so-called other stores, a broad category including computers, books and newspapers and toiletries and cosmetics.

Food sales had a weak month, growing only 0.2 per cent, but the survey period ended on May 26 and did not include the final run-up to the Queen’s Diamond Jubilee, which is expected to boost sales in June’s survey.

Non-store retailing, which include internet sales, increased 1.5 per cent on the month.