Retail sales slip again as inflation weighs on consumer spending
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Retail sales dipped last month as consumers tightened their belts amid the cost-of-living crisis, new data has revealed.
Total retail sales decreased by 1.1% in May, according to the latest monthly BRC-KPMG retail sales monitor.
It represents a slowdown in shopping activity following an average growth of 0.7% over the past three months.
Meanwhile, like-for-like sales were down 1.5% for May compared with the same month a year earlier.
Sales figures are not adjusted for rising price inflation, meaning sales volumes are expected to show a much sharper decline.
The rising cost of living is going to remain the main story for retailers for the immediate future, with consumer confidence a key factor to watch out for
Helen Dickinson, chief executive of the British Retail Consortium (BRC), said: “Sales continued to see declines as the cost-of-living crunch squeezed consumer demand.
“Higher value items, such as furniture and electronics, took the biggest hit as shoppers reconsidered major purchases during this difficult time.
“Nonetheless, fashion and beauty did well as people prepared for holidays abroad and the summer’s social calendar; with red, white and blue outfits adorning shopping carts ahead of the Jubilee weekend.”
Paul Martin, UK head of retail at KPMG, added: “For the second month in a row UK retail sales declined, highlighting that consumers are becoming more sensitive to the cost of living.
“The rising cost of living is going to remain the main story for retailers for the immediate future, with consumer confidence a key factor to watch out for.
“Retailers will be hoping that a post-Jubilee and summer feel-good factor begins to improve confidence amongst some shoppers – as presently overall confidence levels are lower than sales may suggest.”
Non-food retailers, which include fashion and homeware brands, have reported a 1% decrease in like-for-like over the three months to May, with total sales rising 2% as prices were pushed up by inflation.
Meanwhile, food sales dipped by 1.3% on like-for-like basis over the three-month period.
Susan Barratt, chief executive of research firm IGD, said: “Whilst the last four weeks show modest growth, we increasingly expect that value sales are being boosted by inflation this year and that underlying volume trends are weaker as shoppers economise to manage the cost-of-living challenges they face.”
