British retail sales contracted in May as consumers tightened their belts amid a cost of living crisis, fuelling concerns for a downturn in the UK economy.

The quantity of goods bought in Great Britain fell 0.5 per cent between April and May, reversing the expansion in the previous month, according to data published on Friday by the Office for National Statistics.

This was only marginally better than the 0.7 per cent fall forecast by economists polled by Reuters.

However, shoppers spent 0.6 per cent more than in the previous month, even if the volume was lower, laying bare the impact of surging inflation on households’ finances.

May’s fall was “driven by a decline in food sales”, said Heather Bovill, ONS deputy director for surveys and economic indicators.

She added that feedback from supermarkets suggested that “customers were spending less on their food shop, because of the rising cost of living”. 

Line chart of Great Britain, index, Feb 2020=100 showing Retail sales volumes are falling

Food sales fell 1.6 per cent. An increase in clothing sales, which Bovill said was boosted by shoppers buying for summer holidays, was offset by a fall in household goods, down 2.3 per cent. Sales in department stores also fell sharply.

Retail sales volumes are easing from their peak in the spring of last year as consumers have returned to spending on bars and restaurants, not included in the figures, instead of buying groceries.

This comes as separate data by the research company GfK, also released on Friday, showed that UK consumer confidence fell in June to the lowest level since records began in 1974.

Both sets of data increased the possibility of an economic contraction in the second quarter.

Ellie Henderson, economist at Investec, said that the scale of the rise in gas and energy costs, plus other difficulties facing households, including the rise in National Insurance payments, “will almost certainly slow the pace of high street activity sharply over 2022 as a whole”. 



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