// Retail sales slump by 1.1% in May as the cost of living crisis continues
// Like-for-like sales were down 1.5% for May compared with the same month a year earlier
Retail sales slipped last month as Brits tightened their belts amid the cost-of-living crisis, new data has revealed.
Total retail sales fell 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.
British Retail Consortium chief executive Helen Dickinson said: “Sales volumes continued to see significant falls 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.
“Meanwhile, online sales appear to have stabilised as a ‘new normal’, around nine percentage points above their pre-pandemic levels, but well down on the lockdown peaks.
“It is clear the post-pandemic spending bubble has burst, with retailers facing tougher trading conditions, falling consumer confidence, and soaring inflation. Supply chain issues including rising commodity and transport costs, a tight labour market and higher energy bills are forcing retailers to increase their prices, contributing to wider inflation. Profits may be squeezed further, as retailers make significant investments in their own operations and supply chains to mitigate against future price rises for consumers.”
KPMG UK Head of Retail Paul Martin : “For the second month in a row UK retail sales declined, highlighting that consumers are becoming more sensitive to the cost of living.
“Non-food purchases related to the home, such as furniture, home appliances and computing, suffered the biggest falls in spending in May. Online, although still significantly higher than before the pandemic, has now experienced a double-digit decline over the last three months.
“There was better news though for clothing, footwear and accessories sales, with both in-store and online purchasing driven up by the approach of the summer season and the promise of outdoor events and travel firmly on many consumers’ radars.
“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.
Cost and efficiency will firmly be top of agenda for most operators, and understanding how they can protect their margins whilst remaining price competitive for consumers.”
Click here to sign up to Retail Gazette‘s free daily email newsletter