Retail Sales

Cost-of-living crisis bites

Soaring inflation forces consumers to cut back on buying food, prompting a drop in retail sales.

Retail sales overall fell by 0.5% in May, as consumers spent less on food due to the cost-of-living crisis, according to the Office for National Statistics (ONS).

The ONS found that supermarket sales fell by 1.5% in May, with a 2.2% fall in specialist shops such as butchers and bakers. The decrease in the volume of food sales appeared to be linked to inflation which, as measured by the consumer prices index, hit a 40-year-high of 9.1% in May, the ONS said.

However, the figure was 2.6% above pre-Covid-19 levels recorded in February 2020. The data shows the proportion of retail sales online declined from 27.1% in April to 26.6% in May, while online spending values also fell by 1.7% during the month.

Meanwhile, fuel sales volumes rose by 1.1% in May – despite record high petrol prices.

The ONS said: “When asked about their shopping habits in the past two weeks, 44% of adults reported that they were buying less food when food shopping. “This proportion appears to be increasing, having been 41% in the previous period (27 April to 8 May) and 18% at the beginning of [this year].

“Comments from some food retailers highlighted that they are seeing a decline in volumes sold because of increased food prices and cost-of-living impacts.”

Helen Dickinson, the BRC’s Chief Executive, said: “Households reined in spending as the cost-of-living crunch continued to squeeze consumer demand. Many customers are buying down, particularly with food, choosing value range items where they might previously have bought premium goods. High-value items such as furniture and white goods were also impacted as shoppers reconsidered major purchases during this difficult time.”