shoppers rein in spending
The latest batch of retail sales statistics suggests that consumers have become increasingly cautious in recent months adding to concerns over the current state of the UK economy.
Official data published by the ONS revealed that retail sales volumes dropped by 0.5% in May compared to April’s levels. This was the second consecutive monthly fall in spending and the largest reported decline in sales so far this year.
ONS statisticians said the fall was partly due to May’s unseasonably cold weather which had a particularly severe impact on clothing and footwear sales during the month. Indeed, the volume of sales in this sector fell by 4.5% during May, which represents the biggest monthly decline in clothing sales since July 2015. The data also showed that the ongoing decline in spending at department stores continued during May.
There is also evidence that the recent decline in retail sales continued into June, with the latest Distributive Trades Survey conducted by the Confederation of British Industry (CBI) suggesting that sales volumes in the year to June fell at their fastest pace since March 2009. The monthly retail sales balance actually fell to -42 from -27 in May, and this figure was lower than all forecasts collated in a Reuters’ poll of economists.
Some caution does need to be taken with this figure, however, as the survey was comparing current sales with those from a year earlier when the heatwave and England’s unexpected progress in the football World Cup was providing a significant boost to sales. The CBI therefore warned that the sharp fall should be taken with a pinch of salt, although it did stress that the underlying conditions on the high street certainly remain challenging.