The Bank Holidays throughout May failed to provide a boost in sales growth for UK retailers, as the cost-of-living squeeze continued for UK consumers.
According to retail analysts the British Retail Consortium (BRC), total retail sales in the UK increased by 3.9% in May, against a decline of 1.1% in May 2022.
However, this is below the three month average growth of 4.7%, but just above the 12-month average growth of 3.4%.
The BRC also found that food sales increased 9.6% in total, and 9.8% on a like-for-like basis over the three months to May. This is above the 12-month total average growth of 6.9%.
It comes as 20% of shoppers are switching to bulk buying and are no longer purchasing the downsized items, as shrinkflation is being introduced across more product ranges.
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“The trio of bank holidays failed to get shoppers spending as sales growth slowed to its lowest level in six months. While food sales got a boost from the Coronation weekend, this was not sustained for the rest of the month,” chief executive of the BRC, Helen Dickinson OBE said.
“Meanwhile, growth in discretionary spend continued to tumble as the high cost of living squeezed households.
“With consumer confidence still recovering from record depths, and continued tightening of household incomes, we are unlikely to see substantial sales growth in the coming months.”
“But, with signs that inflation has possibly peaked, retailers are hopeful that confidence will continue to improve.”
She added: “Now is not the time for Government to impose more regulation and tax on business that will push up costs for retailers and prices for their customers.”
UK head of retail at KPMG, Paul Martin commented: “Despite warmer weather, a national celebration and month of bank holidays, retailers saw pretty mild growth in May with sales figures up just 3.9% on last year, and lower than the 5% growth seen in April.
“The grocery sector is the fastest growing part of the consumer wallet at the moment, so consumers are having to spend more of their money in the one area that is getting disproportionately more expensive.“
Martin added: “UK consumers are resilient, but with stubbornly high food inflation continuing and the prospect of further interest rate rises threatening to impact their ability to spend elsewhere, it is likely to be a long, hot summer for the retail sector.”
