HomeUncategorizedBank holidays fail to boost sales growth amid ongoing inflation worries

Bank holidays fail to boost sales growth amid ongoing inflation worries

Total UK retail sales rose 3.9% last month, compared with a 1.1% decline in May 2022 and below the three-month average growth of 4.7%, according to the report. BRC-KPMG Retail Sales Monitor.

Food sales were up 9.6% from a year ago, boosted by the coronation but remained flat throughout the month.


Meanwhile, growth in discretionary spending continued to decline as high living costs squeeze households.

The gloom continued for online retailers as only four categories recorded positive sales figures and total sales fell 3%.

There is reason to be optimistic, however, as the brighter weather later in the month has led to sales of summer fashion, as well as much-needed home and gardening products.

British Retail Consortium chief executive Helen Dickinson said: “With consumer confidence still recovering from record lows and household incomes continuing to tighten, we are unlikely to see sales. Significant sales growth in the coming months.

“However, with signs that inflation may have peaked, retailers hope that confidence will continue to improve.”

Paul Martin, KPMG’s UK head of retail, said: “Despite warmer weather, national celebrations and the bank holiday month, retailers have witnessed Growth was mild in May with sales growing just 3.9% year over year and well below the 5% growth seen in April.

“Retailers will be hoping that the level of inflation in the economy as a whole will continue to stay on track to boost much-needed consumer confidence.

“The wild card for the retail sector remains out of control for food inflation, which shows little sign of abating in the near future and this is having a significant stimulating effect on non-essential spending. “

Separate figures from Barclays show consumer card spending grew by just 3.6 per cent year-on-year, down from 4.3 per cent in April, as Britons cut back on discretionary purchases to cope. with inflation and rising food prices.

However, May’s extended weekend has brought a welcome to pubs, bars and clubs as well as the entertainment sector, while both digital content and takeout are available. the highest growth rate since the beginning of the year.

Besides the near-record 19.1% food inflation, Barclays also found that grocery spending received a boost from the coronation bank holiday weekend and Eurovision.

Fuel spending fell for a third straight month, down 10.7% in May, largely due to falling prices.

Amid ongoing concerns about rising food prices, Barclays found that 65% of shoppers have noticed that certain products are now being sold in smaller package or portion sizes while the price is the same or as high. than before.

Products commonly cited as being affected by ‘inflation contraction’ are chocolate, crisps, cookies and snack bars.

In response, one in five consumers (20%) are switching from products that have been miniaturized by manufacturers to buying products in bulk that offer better value for money.

Esme Harwood, director of Barclays, said: “Consumers are still keeping an eye on their daily spending and we are seeing growing concerns around ‘inflation contraction’ in the door. weekly.

“Many people have had to give up discretionary shopping to offset rising food prices, with clothing and restaurants being the hardest hit.

“However, the growth seen in pubs, airlines and entertainment venues suggests Britons are still finding enough room on the budget to enjoy nights out and holidays.”


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