Retail Sales

Food store sales rise

Consumers are changing their shopping behaviour as inflation starts to bite, Barclaycard data has revealed.

Food store sales rose by just 0.1% in July, a decline from the revised 2.7% increase in June when grocery spending was boosted by the Queen’s Jubilee weekend, according to the Office for National Statistics.

However, specialist food stores such as butchers and bakers saw sales jump by 4.7% over the month.

Meanwhile, alcohol and tobacco stores saw sales drop by 8.7%.

In addition, fuel sales dropped by 0.9%, suggesting that the heatwave meant fewer people were choosing to travel. Overall retail sales lifted by 0.3% in July. This figure was significantly higher than economists’ expectations of a 0.2% drop. The ONS statistics reveal online sales picked up in July, with retailers reporting that a range of offers and promotions had boosted spending during the summer months.

Richard Lim, chief executive of Retail Economics, commented: “Cutting back on ‘nice-to-haves’, trading down to cheaper alternatives and delaying non-essential spending are all coming into play as a more cost-conscious consumer emerges. “Sales volumes declined across both food and non-food compared with the previous year, as consumers tighten their belts.

“The outlook is as tough as I can recall. Inflation is still yet to peak, and the impact of rising interest rates takes time to trickle through to households. Consumer confidence has hit an alltime low and even those that do have cash to spend will be more inclined to bolster their rainy-day fund given such an uncertain outlook.”