Retailers bask in May sales boost

The heatwave, bank holidays and half-term led to a welcome uptick in footfall and spending as households flocked to the shops to top up on summer essentials.

For retailers, the outlook for the rest of the summer is looking bright, with the World Cup, school holidays and warmer weather expected to lift spending further amid steadying inflation and easing tensions in the middle east, which should support consumer sentiment.

However, the energy price cap rise in July alongside higher-for-longer interest rates and political turbulence could put the handbrake on spending and limit what should otherwise be a strong trading season.

Moreover, retailers continue to face significant cost pressures, from rising employment costs to more challenging financing and trading conditions. That means strong trading periods like these are no longer just welcome - they are essential.

The businesses that emerge strongest from the summer will be those that can turn higher demand into improved profitability, for example by maximising efficiencies, managing FX exposure and ensuring ready access to flexible finance.