Retail sales fall in May as shoppers dine out

Retail sales fell by 1.4% between April and May as people chose to visit reopened bars and restaurants instead of buying food at supermarkets.

The Office for National Statistics said sales fell most significantly at food stores as consumers took advantage of Covid restrictions being lifted in the hospitality sector to eat out.

In contrast, sales at non-food shops rose on demand for outdoor furniture. The proportion of online sales dipped as people returned to physical shops.

It is the third month in a row that the proportion of online sales has fallen, but the ONS said they “remain nearly 60% higher than the level seen in February 2020” before the pandemic.

The ONS said that the volume of food sales dropped by 5.7% between April and May.

New figures from Tesco for the three months to 29 May appear to follow the trend. It said like-for-like sales grew strongly in March before “moderating” in April and May.

Tesco said that compared to the same period last year – when supermarkets experienced a rush in trade during the first lockdown – sales across the group rose by 1%.In the UK alone, trade rose by 0.5%.

Compared with the first quarter of 2019 before the pandemic, Tesco said sales were up by 8.1%.

ONS data shows that sales at non-food shops grew by 2.3% between April and May although there were “contrasting pictures within the sector”.

Shops selling households goods reported a sharp rise in sales with anecdotal evidence suggesting “increased spending on outdoor garden furniture in preparation for the summer and the relaxation of social gathering rules”.

Toy and sports equipment retailers also saw a rise in trade.

Conversely, sales fell for both clothing and department stores, but the ONS said this followed strong growth in previous months and compared to May last year clothing shop sales rose 28.9% and department stores increased by 12.6%.

Paul Dales, chief UK economist at Capital Economics said that while the 1.4% fall in retail sales was “disappointing”, he said it “may not mean that overall consumer spending is much weaker than we have been expecting if there was just a bigger shift in spending from the shops to the pubs as indoor hospitality reopened in mid-May”.

Source: bbc.com