Retail sales fall in May as consumers spend more eating out

Retail sales in Great Britain unexpectedly fell last month for the first time since January as consumers spent more on meals and drinks out and less on grocery shopping.

The volume of retail sales fell 1.4 per cent in May compared with the previous month, data from the Office for National Statistics showed on Friday. Economists polled by Reuters had forecast a 1.6 per cent increase.

The decline followed a jump of almost 10 per cent in April, when non-essential shops were allowed to reopen for the first time since early January in most of the country.

There were signs that food store sales had suffered because “the reopening of hospitality meant consumers took advantage of eating out instead”, said Darren Morgan, ONS director of economic statistics.

He added, however, that household goods stores and garden centres fared well. “People spent money on improving their gardens in anticipation of the summer and the lifting of restrictions on outdoor gatherings,” Morgan said.

The largest contribution to the monthly decline in May came from food stores, where sales volumes fell 5.7 per cent. Indoor hospitality reopened on May 17 in many parts of the UK.

Non-food stores, in contrast, reported a 2.3 per cent increase. Household goods stores, such as furniture, reported the fastest growth, of 9 per cent.

The proportion of retail sales conducted online remains much higher than before the pandemic. Nevertheless, nearly all retail sectors in May reported a fall in the proportion of online sales as consumers returned to physical stores.

The total proportion of sales that were made online dipped from 29.8 per cent in the previous month to 28.5 per cent.

After the large increase in retail sales in April and the fall in May, sales volumes are still 9.1 per cent higher than in February 2020, before the pandemic.

Aled Patchett, head of retail and consumer goods at Lloyds Bank, said adverse weather in May “was another unfortunate blow for the high street.”

He added that the government’s decision to extend Covid-19 restrictions by another four weeks “will continue to apply pressure to high street [business] models, particularly if new variants further dampen footfall.”