Retail sales fell 0.5% in May, figures out today show.
Spending in food stores fell 1.6% while fuel sales up as more people head back to the office.
Danni Hewson, AJ Bell financial analyst, comments on latest retail sales figures: “The latest retail sales figures won’t tell anybody anything they don’t already know, but they do provide an interesting snapshot into how consumers are wrestling with inflation. Quite simply they’re buying less of pretty much everything, from food to furniture. At supermarket checkouts people are setting limits, own brands are replacing big name favourites and shoppers are trading down in the hopes of getting a little more for a little less.
“There are a couple of notable exceptions. Those people who are managing to get away on holiday are updating their summer wardrobes— for many it’s been a couple of years since they’ve needed beach wear and the lipstick effect is very much in evidence. Cutting back is hard work, it’s demoralising, so spending a little on something that makes you feel better about yourself, particularly when it’s combined with a much longed for vacation seems like a no-brainer. And with a glut of postponed events clogging up the calendar, there will be a few people needing to adjust for lockdown habits.
“Then there’s another hike in fuel sales. The price at the pump might trigger mild palpitations every time motorists fill up, but businesses have been pushing hard to get more people back in the office. Hybrid working is undoubtedly here to stay and fuel sales haven’t returned to pre-covid levels, but they have been slowly creeping back up. It will be interesting to see how recent train strikes, which have forced many people back to their kitchen tables, will impact the trend.
“Looking beyond the snapshot of the last month its clear there’s more than just inflation at play. People have been spending less on ‘stuff’ since the summer as other options became available to them. Consumers have also been spending less online, but habits have changed and even people who weren’t comfortable shopping from their sofas have been won over and will still reach for their tablets if life gets in the way of them hitting the high street.
“But it is rising prices that will be troubling retailers the most as they look beyond the summer months and towards that crucial golden period. Budgets don’t stretch, a pound can only be spent once and people are having to make tough choices.”