Retail sales fell further in May as shoppers slashed spending across the board, from food to furniture, as the cost of living crisis bites.
With April’s rising bills swallowing a much bigger slice of people’s incomes and food prices going up, the amount of goods Britons bought from retailers dropped by 0.5 per cent between April and May.
The Office of National Statistics said the drop in retail sales over the month came after sales at food stores fell by 1.6 per cent.
Supermarket sales were down 1.5 per cent over the month, while specialist stores like butchers and bakers seeing a 2.2 per cent drop.
Falling sales: Specialist stores like butchers and bakers saw sales volumes fall 2.2% in May
Rising shop prices, especially for groceries, mean that 44 per cent of Britons reported they were buying less food in the past two weeks, up from 41 per cent in the previous fortnight and 18 per cent at the start of the year.
Heather Bovill, deputy director for surveys and economic indicators at the ONS, said: ‘Feedback from supermarkets suggested customers were spending less on their food shop because of the rising cost of living.
‘These rises were offset by falls for household goods and department stores, with retailers in these areas reporting consumer reluctance to spend due to affordability worries and higher prices.’
Supermarket giant Asda said earlier this week that some shoppers were asking cashiers to stop scanning items when the till total hits ?30 to cut costs.
Shoppers are also swapping branded items for cheaper own-label alternatives, as food inflation hit 8.3 per cent this month adding ?380 to the average food bill, according to figures by Kantar released this week.
And official figures on Wednesday showed inflation has reached a fresh 40-year high of 9.1 per cent and there are fears a large drop in spending by consumers may tip the UK into a recession.
The drop in retail sales over the month came after sales at food stores fell by 1.6%
Despite the drop in sales – with the ONS also reporting a 4.7 per cent decline compared to a year ago – people are still spending more.
The value of retail purchases rose 5 per cent compared to last year and by 0.6 per cent over the month.
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown, said that given that inflation over the period was 9.1 per cent ‘this is clear evidence that we’re cutting back’.
The biggest decline in spending was seen on alcohol and tobacco, with sales down 4 per cent in May.
Household goods and in department stores also suffered, with sales dropping 2.3 per cent and 1.1 per cent, respectively.
Shoppers refreshing their wardrobes ahead of summer holidays helped lift clothing sales
Only fuel and clothing sales are up since April, rising 1.1 per cent and 2.2 per cent respectively.
The ONS said the rise in fuel sales partly reflected more workers returning to the office, while shoppers refreshing their wardrobes ahead of their summer holidays helped lift clothing sales.
Sales at non-food stores were flat over the month.
The proportion of online sales slipped back to 26.6 per cent from 27.1 per cent in April as shoppers increasingly returned to stores, but the ONS said this remained ‘substantially higher than before the pandemic’.
Martin Beck, chief economic adviser to the EY ITEM Club, said the retail sector was ‘effectively already in recession’ and expects a marked slowdown in sales later this year.
‘Stepping back from the May data, it’s clear that sales have been on a steady downward trend since the April 2021 peak when the economy began to emerge from the last COVID-19 lockdown,’ he said.
‘In the earlier part of this period, the fall was largely a function of the rotation back towards social consumption and away from goods.
‘But that process appeared to have been largely completed by the first few months of this year, and the recent weakness is likely to be a function of the squeeze on household finances.’
Beck expects second half of 2022 to be a ‘challenging period for retailers, with consumer spending power under significant pressure from very high inflation and personal tax rises, and with confidence continuing to decline’.