Food price rises drive fall in retail sales

Food sales fell by 1.6% in May 2022 as a result of the ongoing cost-of-living crisis, the Office for National Statistics has revealed.

As a result, the fall in food sales have also impacted overall retail sales, which fell by 0.5% in May 2022 following a slight increase of 0.4% in April 2022.

In the three months to May 2022, sales volumes fell by 1.3% when compared with the previous three months; this continues the downward trend since summer 2021.

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Despite this, sales volumes were 2.6% above their pre-coronavirus February 2020 levels.

Maxim Syn, head of desk at global financial services firm Ebury, said the “triple whammy” of NI hikes, spiralling food prices and energy cap increase in April dampened demand as household budgets were squeezed from all directions as the weakening pound and global inflationary pressures create further headwinds for the economy and shoppers to navigate over the coming year.

“Consumers were hit with a triple whammy of rising fuel prices following the energy cap increase, spiralling food prices and a hike in National Insurance in April. While the NI contributions are set to fall again in July, it is clear that the squeeze on household budgets coming from all directions is really starting to impact consumer demand.”

He added: “Food prices in particular have seen big increases with Wednesday’s inflation figures showing food was the biggest contributor with bread, cereals and meat seeing the largest upticks. This is down to rising wholesale food prices and the cost of raw materials.

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