Retail Cools Slightly In May

Sales at large retailers cooled slightly in May, slipping 0.3% from April. This was the first decline in sales at large retailers in 2005. In 2004, sales were weak in the final few months, but prior to this, sales had generally been increasing.

Half of the major commodity groups saw their sales fall in May, with the sharpest decline in the sales of clothing, footwear and accessories. Hardware, lawn and garden products, and sporting and leisure goods also posted sizeable decreases. The strongest sales growth in May was in the food and beverages commodity group.

Clothing, footwear and accessories decreased by 4.5% and erased all of the sales gains since January. Women's clothing sales in particular were hard hit, plummeting 6.7% after four months of gains. This was the most severe sales decrease in three years for women's clothing. However, other commodities in this group did not fare much better. Men's clothing, children's clothing, footwear, as well as accessories such as jewellery and watches, and luggage and leather goods also declined in May at large retailers.

Hardware, lawn and garden sales declined 3.3% in May. Sales of this commodity group decreased in four of the past five months at large retailers. Most of the decline in May was due to a 5.1% drop in the sale of lawn and garden products.

Another area of weakening sales at large retailers was sporting and leisure goods, which contracted 3.1% in May. In particular, sporting good sales were hard hit, dropping by 7.1%. Sales of sporting goods have moved downward in three of the past four months after an 8.6% jump in January. Toy and hobby supply sales also declined in May, losing 2.9%. Prior to this decrease, toy sales had been strong since the start of 2005, with four consecutive months of growth.

Food and beverage sales were the primary area of strength for large retailers in May, up 2.4%. Sales of both alcoholic and non-alcoholic beverages were up strongly, regaining ground lost after large declines the previous month. Food sales were also up in May, continuing a trend of gradually accelerating growth that started in 2002.