Shopping baskets lighter as sales are down again

The biggest drop in spending was on alcohol and tobacco, ONS data shows
Sales in supermarkets dropped in May, according to ONS figures (PA)
PA Wire
John Dunne @jhdunne24 June 2022

Retail sales fell in May as consumers reined in their grocery spending amid belt-tightening due to the cost-of-living crisis, according to official figures.

The Office for National Statistics said the drop in retail sales over the month came after sales tumbled 1.6 per cent across food stores.

The ONS also revised down sales growth in April, from the 1.4 per cent previous estimation to an increase of 0.4 per cent. It found that sales in supermarkets dropped 1.5 per cent over May, with a 2.2 per cent drop in specialist shops such as butchers and bakers. But the biggest decline in spending was seen on alcohol and tobacco, with sales down four per cent.

The data likewise showed a pull back in spending on household goods and in department stores, with sales dropping 2.3 per cent and 1.1 per cent respectively, as shoppers worry about affordability.

It comes amid mounting signs the cost-of-living crisis is beginning to take its toll on the economy.

Supermarket giant Asda has said that some shoppers were asking cashiers to stop scanning items when the till total hits £30 to cut costs.

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.

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.

“More workers returning to the office may have contributed to increased fuel sales this month while shoppers buying outfits for summer holidays helped boost clothing sales.”

“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.”

Industry figures from Kantar this week revealed shoppers are set to see their annual grocery bill jump by £380 to £4,960 in 2022 as inflation sends prices rising across the board.

Martin Beck, chief economic adviser to the EY ITEM Club, said the second half of 2022 will 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”.

He added: “The retail sector is effectively already in recession and the wider consumer sector is likely to experience a marked slowdown this year.”

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