Squeezed consumers cut their spend in May, according to the latest BRC-KPMG Retail Sales Monitor, which saw the furniture category placed firmly on the back burner.
Total?sales decreased by -1.1% in May, against an increase of +28.4% in May 2021.?
UK retail sales decreased -1.5% on a LFL basis from May 2021, when they had increased +18.5%.
Online non-food sales decreased by -8.5%, compared with a decline of -8.1% in May 2021.?
The non-food online penetration rate decreased to 38.7% in May from 42.2% in May 2021.
BRC chief executive Helen Dickinson OBE says:?“Sales continued to see declines as the cost-of-living crunch squeezed consumer demand. Higher-value items, such as furniture and electronics, took the biggest hit as shoppers reconsidered major purchases during this difficult time.
"Nonetheless, fashion and beauty did well as people prepared for holidays abroad and the summer’s social calendar –?with red, white and blue outfits adorning shopping carts ahead of the Jubilee weekend. Meanwhile, online sales appear to have stabilised at a ‘new normal’, with the share of total non-food retail sales coming through digital channels settling at around 39% compared with 30% pre-pandemic, though this is well down on lockdown peaks.
“It is clear the post-pandemic spending bubble has burst, with retailers facing tougher trading conditions, falling consumer confidence, and soaring inflation impacting consumers spending power. Supply chain issues including rising commodity and transport costs, a tight labour market and higher energy bills are forcing retailers to increase their prices, contributing to wider inflation. Profits may be squeezed further, as retailers continue to find efficiencies in their own operations and supply chains to reduce the impact of future price rises for consumers.”
These sales figures are not adjusted for inflation. Given that both the May SPI (BRC) and April CPI (ONS) show inflation running at historically high levels, the small drop in sales masked a much larger drop in volumes once inflation is accounted for.