- Retail sales figures up 0.3% in May
- Consumers splash out on summer clothes and sprucing up gardens
- Food sales dip as shoppers treat themselves to takeaways
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK retail sales figures:
“A third bank holiday coupled with a bit of sunshine gave Brits the perfect opportunity to forget their troubles and splash whatever cash they had on summer togs and new kit for the garden.
“The lucky ones might have dipped into savings, whilst many more will have reached for the credit card in order to make the most of not one, but three long weekends.
“Fuel sales rocked up, thanks in part to the fact that the price at the pump has come down to levels not seen since Russia invaded Ukraine. But many motorists used the coronation as the perfect excuse to visit friends and family, or finally enjoy a bit of sunshine with a few days at the coast or in a rural beauty spot.
“There was also the little issue of rail strikes which meant those who couldn’t work from home were forced to make alternative arrangements and for some that would have been jumping back in the car.
“And industrial action might well have impacted people’s decision on where they were going to shop, with clothing sales up online but down in stores, though some could just have decided the month was too packed to waste time perusing the aisles.
“May was a month for DIY, making sure gardens were fit for all those parties or just making the most of outdoor spaces once the sun finally deigned to shine.
“But cost pressures were evident everywhere and people were selective with their spending, cutting back on their weekly food shop in order to pay for a cheeky takeaway, little treats that have taken on new resonance.
“Retailers and hospitality businesses had already hinted at this consumer resilience with high street giant Next going as far as commenting that pay rises had inspired confidence and that had sent their tills ringing.
“And it’s exactly that resilience the Bank of England has been troubled by. The service sector was largely responsible for keeping the UK economy in positive territory in April and though all those bank holidays are likely to send May’s number in the other direction it’s clear there is still a lot of money being spent.
“For those feeling the squeeze of higher mortgage payments, or those already crippled by cost of living pressures, life is tough and money is in short supply. But there are millions more still sitting on low fixed rates who are only just beginning to contemplate what lies ahead. Those consumers are likely to start cutting back and retailers are right to be wary.”
