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Food offers boost retail sales

Supermarket offers on food helped drive retail sales higher than expected last month, adding to signs of optimism over consumer spending.

Retail sales volumes increased 2.1% in May month-on-month - significantly ahead of economists' hopes for a 0.8% increase - as sales rebounded from an unseasonably cold April.

Much of the sales uplift came from food stores, the Office for National Statistics (ONS) said, as supermarkets lured in shoppers with promotions and discounts.

Buoyant retail sales will add to signs of recovery in the economy, fuelling hopes the UK's output can grow by 0.5% in the second quarter.

Martin Beck, UK economist at Capital Economics, said the figures are "further evidence that a recovery in the UK economy may be taking root".

Alan Clarke, fixed income strategy director at Scotiabank, said the UK was on a "food binge" in May. "This volatility in retail sales is all about food," he said. "Either there was a big influence from the poor weather, the timing of Easter caused some distortions or the whole country was on a crash diet in April that was then reversed in May."

The amount of food bought increased by 3.5% month-on-month, the ONS said, while sales of clothes, shoes and textiles rose 1.4% on the month. Sales of household goods increased 0.7% month-on-month.

The ONS added almost all store types reported a rebound in sales from April, which was hit by unseasonably cold weather. It said: "Feedback from retailers suggested that promotions on summer ranges led to this increase in sales."

Compared with a year earlier, retail sales volumes in May were up 1.9%, as shoppers bought the biggest quantity of retail goods on record. The amount spent on retail goods also rose 2.1% month-on-month and was up 3.1% on a year earlier.

Internet sales continued to soar, the ONS added, with spending increasing 10.3% on a year earlier. Online sales now account for 9.7% of retail spending.

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