UK retail sales fall in May as Brits swapped supermarkets for restaurants
UK retail sales fell by 1.4 per cent in May following a sharp increase in April when lockdown restrictions were eased, according to new Office for National Statistics (ONS) data.
The monthly drop was unexpected, with economists predicting a 1.6 per cent increase.
The largest contribution to the decline came from food stores, where sales volumes fell by 5.7 per cent.
The ONS said that the easing of hospitality restrictions led to consumers swapping supermarkets for eating and drinking out at restaurants and bars.
“One of the wettest Mays on record was another unfortunate blow for the high street, which has seen shoppers return in good – if not full – force since April’s re-opening,” said Aled Patchett, head of retail and consumer goods at Lloyds Bank.
“There was at least some relief for hard-hit fashion retailers, who were well-served by the re-opening of hospitality.”
Boost for hardware and furniture shops
Despite the monthly decline, over April and May combined, retail sales were still 7.7 per cent higher than in March 2021.
The amount of money changing hands in UK shops was also 9.1 per cent higher than pre-pandemic levels.
Non-food stores reported a 2.3 per cent increase in monthly sales during May, with hardware and furniture shops posting the largest growth of nine per cent.
There was also strong growth in fuel sales and non-food retailers, rising 19.3 per cent and 17.8 per cent respectively.
“Despite a slight monthly decline on April, May nonetheless marked another month of progress for the retail sector,” said Lynda Petherick, retail lead at Accenture.
“In the first full month of trading since non-essential retail reopened for business, it seems shoppers were all too happy to deliver on the kind of pent up demand the industry desperately needs, although the reopening of hospitality venues meant food sales took a hit.”
Online shopping preferred choice for many
The sharp increase in sales volumes over April and May has resulted in them being 8.3 per cent higher than the previous three months.
“Pent-up consumer demand will be key to the success of UK retail in the months ahead, but as lockdown continues to ease we are seeing retailers’ share of wallet reduce slightly as the public enjoys more and more choice on where to spend their hard-earned pounds,” said Karen Johnson, head of retail & wholesale at Barclays Corporate Banking.
The proportion of retail sales conducted online remains much higher than before the pandemic, but in May all retail sectors reported a fall in digital transactions as customers returned to stores.
In comparison with February 2020, the value of total online retail sales in May 2021 was almost 60 per cent higher, while in-store purchases were 1.3 per cent lower.
“Lockdown being extended for four more weeks means for many, holiday outfits will still be on hold, so it’s too soon to tell if a return to the high street will outlive the height of summer,” said Emma-Lou Montgomery, associate director at Fidelity International.
“Retailers large and small will be working hard to sustain shoppers’ interest in physical stores rather than the convenience of online shopping.”