Retail sales across the UK fell 0.1% in June, according to the latest figures from the Office of National Statistics (ONS).
The organisation also downgraded its retail figures in May to a 0.8% drop from its initial estimate of 0.5%.
“The bottom lines is people are buying less. Big ticket items are being put on hold until life becomes more affordable,” said AJ Bell investment analyst Danni Hewson.
“Day to day spending requirements are being carefully weighed and costed, and when the price tag gets too high there’s no choice but to cut back.”
Jubilee boosts food sales
Food sales grew 3.1% as people across the UK celebrated the Platinum Jubilee, with snacks, alcohol and sweet treats driving grocery figures as consumers indulged in parties thrown to commemorate the special occasion.
“People did splurge on their street parties, house parties and bank holiday breaks. The nation raided supermarket shelves for party snacks, filled trollies with cases of beer and wine, and in some cases even bought all the bits needed to whip up a Jubilee pudding,” said Hewson.
“It was a moment to lose themselves, to push problems aside and enjoy the festivities with friends and families. But June’s 0.1% fall in retail sales won’t fool anybody – the sector is under siege and the Jubilee celebrations papered over the cracks at best.”
Fuel sales fall on spiking prices
A cold reminder of the cost of living crisis hit in the spectre of fuel sales, which slid 4.3% as crushing petrol prices forced motorists to cut back on filling up their vehicles.
“With prices at the pumps hitting record levels motorists had to think carefully about every journey,” said Hewson.
“If it was manageable people were swapping four wheels for two, or pulling on their trainers to avoid using what is beginning to feel like the liquid gold needed to power our motors.”
Retail sales decline
Non-food store sales fell 0.7% as a result of a 4.7% drop in clothing store volumes and a 3.7% decline in furniture stores.
Customers pared back on clothing and big retail investments as the enthusiasm to stock post-lockdown wardrobes died down, and soaring 9.4% inflation tamped down consideration of pricy purchases such as new household items.
“The rush to refresh wardrobes is over. Clothing sales have plummeted, perhaps partly because shoppers have bought their holiday attire and celebratory outfits, but mostly because prices have been creeping up and retailers know affordability is an issue,” said Hewson.
Online shopping
Non-store retailing, such as online shopping, fell by 3.7% year-on-year. However, sales volumes were 20.8% above February 2020 levels.
The proportion of online retail sales fell to 25.3% over the month, reaching its lowest proportion since March 2020 and continuing a downward trend since its peak in February 2021.
“It’s no co-incidence that designer sofa maker Made.com has issued its third profit warning in the last week. Online retail has taken a big hit and virtual household goods stores have watched sales tumble almost twenty percent in the last year,” said Hewson.
“It’s not a pretty picture and, with inflation expected to heat up further just as that all important golden period begins, the sector will be nervous.”
“Savings are dwindling and simply covering day to day living costs is becoming harder.”