Britain’s main statistical agency said Friday that retail sales slowed in May as high inflation continued to weigh on the sector but strong online sales numbers ensured growth remained in the black. File Photo Hugo Philpott/UPI
June 23 (UPI) — Retail sales growth in Britain slowed in May as rising cost of living and food prices exerted a drag on spending with consumers cutting back on grocery shopping but strong online sales ensured volumes held up better than expected, figures out Friday show.
Retail sales volumes increased by an estimated 0.3% in May, down from a 0.5% rise in April, pulled lower by a 0.5% fall in food store sales, but this was partly offset by a 2.7% jump in non-store retailing volumes with online retailers’ sales of traditional summer lines benefiting from good weather, the Office for National Statistics said.
Gasoline and diesel sales reversed a 1.7% fall in April to grow by 1.7% but volumes remain almost 10% below their pre-COVID-19 level of February 2020.
Sales volumes had been forecast to shrink by 0.2% in May but the positive growth delivered still left volumes 2.1% lower than in May 2022. That compared with a 3.4% year-on-year fall in April.
The ONS highlighted a statistical anomaly created by the high consumer price inflation affecting Britain’s economy where Britons are spending almost a fifth more on retail purchases than in February 2020, but the amount of goods they get for their money has shrunk almost 1% — with the gap continuing to widen.
“Retail sales grew a little in May, with online shops doing particularly well selling outdoor goods and summer clothes, as the sun began to shine. May also saw a return to growth for fuel sales after a dip in April,” said ONS Senior Statistician Heather Bovill in a Twitter post.
“Garden centers and DIY stores also saw growth, as the good weather encouraged people to start home and garden improvements.
“These were offset by food sales, which fell back as prices in supermarkets continued to rise, exacerbated by many people ordering takeaways and drinking out more during the extra bank holidays. While jewelery and art also fell back after a strong April,” Bovill said.
A 13th consecutive interest rate rise by the Bank of England to 5% on Thursday as it stepped up its battle to bring prices under control is likely to exert further downward pressure on retail sales as higher mortgage and loan repayments hit consumers’ discretionary spending power.
The central bank’s 50 basis points hike was in response to inflation numbers released Wednesday showing inflation stuck at 8.7% in May, unchanged from April, and underlying inflation which strips out volatile items such as food and energy on the rise.