Retail sales down as consumers start to feel the pinch
- Published
Consumers spent less at the shops last month as they felt "the pinch" from rising inflation and weak wage growth, the British Retail Consortium has said.
In the month to the end of May, sales in shops fell by 4.4%, the sharpest fall in four and a half years.
The BRC, which monitors sales with the accountancy firm KPMG, said the decline was "striking".
Separately, Barclaycard said that the level of consumer confidence in the UK was at its lowest for two years.
Under pressure
However the figures come after a relatively healthy month in April.
Paul Martin, UK head of retail at KPMG, said retailers had been "brought back down to earth with a thump".
"With inflation continuing to rise and wage growth stagnating, consumers are starting to feel the pinch."
The survey also found that online sales of non-food products grew at the slowest pace since December 2012, when records began.
Shoppers spent 4.3% more online in May than in the same month last year. A year ago, online sales were growing by nearly 14%.
Putting shop and online sales together, consumers spent 0.4% less in May than they did in April.
Eating out
Barclaycard said that a poll conducted by YouGov last month for the card provider found that 53% of people felt confident about their household finances.
But that figure was down from 70% in March, and the lowest reading since the beginning of 2015.
Barclaycard's own data found that growth in consumer spending fell to 2.8% in May, the lowest for 10 months.
That was marginally above April's inflation rate of 2.7%, as measured by the Consumer Prices Index (CPI), indicating real-terms growth in consumer spending was tiny.
However Paul Lockstone, managing director at Barclaycard, said to was far too early to suggest that this was the beginning of a period of increased caution.
In some sectors spending actually fell. Barclaycard said shoppers spent 2.9% less on household goods and clothing in May from a year earlier.
However, consumers spent 11.5% more in cinemas, and 11.7% more in restaurants.
Barclaycard handles nearly half of all spending on UK credit and debit cards.