Retail sales tumble in May as consumers cut back on food shopping

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Retail sales dropped in the month of May as the cost-of-living crisis hit consumer wallets.

Grocery basket

Retail sales in food stores were down 1.6% for the month of May

Retail sales excluding fuel inched up 1.7% year on year on a value basis, but tumbled 5.7% by volume as customers cut back on spending, according to the latest data from the Office for National Statistics (ONS).

This fall in sales volumes was driven by a decline in sales in food stores, down 1.6% for the month of May as inflation caused prices to skyrocket.

The ONS reported that 44% of adults surveyed in its opinions and lifestyle survey said they were cutting back on their food shop.

Non-food store sales volumes stayed flat at 0% as a 2.2% increase in clothing sales was offset by a 2.3% decline in sales of household goods and furnishings.

The proportion of retail sales online fell to 26.6% in May 2022 from 27.1% in April, but remains substantially higher than the 19.7% in February 2020 before the coronavirus pandemic.

EY UK and Ireland retail lead Silvia Ridone said: “We are now seeing rising food prices and the cost of living begin to affect consumer spending at all levels of the socio-economic scale.

“At the start of the year, while lower-income households were affected by rising commodity prices and inflation, we saw higher-income consumers, buoyed by additional savings accumulated over the pandemic, spending their disposable income on holidays, eating out and high-value products. However, we are now seeing those higher-income groups also become more cautious and selective on where they are spending, particularly when it comes to big-ticket items.

“Retailers are now facing a ‘trilemma’ of challenging trading conditions: rising costs, slowing demand and excess supply. Many businesses overestimated demand and purchased too much stock at the start of the year and have now been left with excess products, which they are trying to sell at a heavy discount.

“Looking ahead, we anticipate that retail sales over the summer months will remain steady. It is vital that retailers use this time to regroup and focus their attention on improving operational resilience and optimising working capital for what could be a challenging autumn.”