High food price suppresses consumption in the UK
Total retail sales rose 3.9 percent in the country, according to monthly retail data released by the British Retailers Association (BRC) and KPMG. This rate was 1.1 percent in the same period of last year.
Growth in retail sales was at the lowest level in the last 6 months in May due to rising food prices. On the other hand, an average of 3.4 percent growth was seen in retail sales in the last 12 months.
Despite high prices, food sales increased by 9.6 percent. This rate was calculated as 9.8 percent on the average of the last three months.
BRC Chief Executive Officer, Helen Dickinson, in her assessment of the data, stated that the public holidays in May were not enough to increase consumer spending, “Growth in consumer spending fell to the lowest level in the last 6 months. Food sales on the weekend of King Charles III’s coronation ceremony. “This trend could not be sustained for the remainder of May. While the cost of living continued to put pressure on households, growth in discretionary spending also declined,” he said.
“Sales are unlikely to grow as household income shrinks”
On the other hand, Dickinson noted that sales in summer fashion and gardening products supported the recovery with the warming of the weather.
“As Consumer Confidence is barely recovering from its bottom and household incomes continue to shrink, we are unlikely to see significant sales growth in the coming months. However, with signs that inflation has now peaked, retailers are hopeful that consumer confidence will rise. More regulation for business is now available for the government. And this is not the time to impose taxes, because that will increase costs for retailers and prices for consumers.”
“The summer will not go well due to stubborn inflation”
Paul Martin, UK Retail Unit Manager of KMPG, stated that the growth in consumer spending in May remained low compared to the 5 percent level in April.
Expressing that the total sales on the internet decreased by 3 percent, Martin said that this was due to the increasing tendency of consumers to bargain in stores.
Martin added that they do not foresee a very good summer for the retail sector due to persistent inflation and interest rates that are expected to continue to rise.
