Royal wedding hangover hits high street sales
Retail sales volumes dropped by 1.4% month-on-month in May, the Office for National Statistics (ONS) said, as food stores and household goods retailers both saw sales slide.
Food stores saw the first decline in volumes for 14 months as fuel prices and the knock-on effect of the current economic environment hit spending and reversed a record performance in April.
Advertisement
Hide AdAdvertisement
Hide AdThe figures were much worse than City predictions for a decline of between 0.6% and 0.9%.
May’s decline also slashed year-on-year volume growth to just 0.2% from 2.4% in April, a figure which was revised lower today from 2.8%.
The ONS said the absence of April’s special events affected the figures but added that consumers cutting back as a result of increasing fuel prices and uncertainty over pay and job security also had an impact.
Food store volumes fell by 3.5% year-on-year but the value of sales rose by 1.7%, with retailers lifting prices by 5.3% to claw back some volumes.
Advertisement
Hide AdAdvertisement
Hide AdFurniture, electricals goods and DIY shops also saw volumes decline sharply, with a 6% drop in May compared with last year, although the comparative period was boosted by pre-World Cup spending.
Vicky Redwood, an analyst at Capital Economics, said: “We expect this trend to worsen as households respond to the intensifying squeeze on their real pay. We continue to think that overall household spending will drop by about 1% this year.”