UK retail sales slide as consumers cut discretionary spending

Helen Cahill
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Food retailers are faring better than non-food retailers (Source: Getty)

Retail sales fell back again last month as consumers started counting the pennies and cut their discretionary spending.

Like-for-like retail sales were down by 0.4 per cent in May, according to figures from the British Retail Consortium (BRC), falling back from the sales boost the sector received over the Easter holiday.

Non-food retailers dragged on sales as consumers cut their spending on discretionary items, with like-for-like sales in this sub-sector falling by 0.3 per cent over the three months to May.

Read more: High street sales falter in May as retailers struggle against online surge

Meanwhile, food retailers' sales increased 3.2 per cent over the same period. Helen Dickinson, BRC's chief executive, said the growth for the grocery sector was partly due to inflation, which hit 2.7 per cent in April.

Dickinson said the government needs to consider how to keep retailers' prices low in Brexit negotiations.

"This means, as well as securing a tariff-free trade deal with the EU, negotiating frictionless customs arrangements; providing certainty for EU colleagues working in the UK; and ensuring the continuity of existing EU legislation as it transfers into UK law," she said.

Read more: Leisure is key to the future of London retail

Richard Lim, chief executive of Retail Economics, said:

These latest figures show a worrying slowdown in discretionary spending. Sales across non-food retailers has slowed sharply since the turn of the year with personal finances coming under increasing pressure from rising inflation and weaker wage growth.

He said profits in the retail sector will "come under increasing pressure" as wage growth continues to fall and input costs rise due to the fall in the value of the pound.

High street sales were also affected by the consumer spending slowdown, falling by 1.3 per cent year-on-year in May.

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