UK retail sales drop on high inflation

LONDON

British retail sales by volume dropped in May as soaring inflation caused consumers to limit spending, especially on food, official data showed on June 24.

Sales fell 0.5 percent compared with a rise of 0.4 percent in April, the Office for National Statistics (ONS) said.
April’s data was sharply revised lower after an initial estimate showed retail sales had jumped 1.4 percent.

“Retail sales fell in May driven by a decline in food sales,” said Heather Bovill, deputy director for surveys and economic indicators at the ONS.

“Feedback from supermarkets suggested customers were spending less on their food shop because of the rising cost of living.”

She added that department stores and companies selling household goods in May reported “consumer reluctance to spend due to affordability worries and higher prices.”

This was partly offset by higher fuel sales and purchases of summer clothing.

Inflation around the world has hit the highest levels in decades on soaring energy and food prices.

Businesses are experiencing supply constraints as COVID lockdowns are lifted and following Russia’s invasion of Ukraine.

Resulting price hikes mean “consumers are increasingly making more considered decisions about how they spend their money, as the cost-of-living squeeze on finances becomes more acute”, Myron Jobson, senior personal finance analyst at Interactive Investor, noted on June 24.

U.K. food stores saw sales volumes slide 1.6 percent in May, the ONS added.