Shopping baskets lighter as sales are down again

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ONS data shows biggest drop in spending on alcohol and tobacco

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According to official data, eTel sales slumped in May as consumers braced for a belt-tightening due to the lingering crisis caused by slashing their grocery spending.

The Office for National Statistics said the decline in retail sales over the month came after a 1.6 percent drop in sales in food stores.

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The ONS also revised up sales growth in April, an increase of 0.4 percent from the previous estimate of 1.4 percent. It found that sales in supermarkets fell 1.5 percent in May, with specialist stores such as butchers and bakers down 2.2 percent. But the biggest drop in spending was seen on alcohol and tobacco, with sales falling by four per cent.

Similarly, the data showed a pullback, with sales at home goods and department stores down 2.3 percent and 1.1 percent, respectively, as shoppers worry about affordability.

This comes amid growing signs that the cost of living crisis is beginning to take its toll on the economy.

Supermarket giant Asda has said some shoppers were asking cashiers to stop scanning items until a total of £30 is hit to cut costs.

Inflation hit a 40-year high of 9.1 per cent on Wednesday, official data showed and fears that a large drop in consumer spending could push Britain into recession.

Heather Boville, deputy director of surveys and economic indicators at ONS, said: “Feedback from supermarkets suggested that customers were spending less at their food store due to rising cost of living.

“More workers returning to the office may have contributed to the increase in fuel sales this month, while shoppers buying clothes for the summer holidays helped boost clothing sales.”

“These increases were offset by declines for home goods and department stores, with retailers in these areas reporting consumer reluctance to spend due to affordability concerns and higher prices.”

Industry data from Kantar this week showed shoppers are set to see their annual grocery bills jump from £380 to £4,960 in 2022 as inflation sends prices soaring across the board.

Martin Beck, chief economic adviser at EY ITEM Club, said the second half of 2022 “will be a challenging period for retailers, with consumer spending power under significant pressure from very high inflation and personal tax hikes, and confidence will continue to decline”. .

He added: “The retail sector is effectively already in recession and the broader consumer sector is likely to experience a marked slowdown this year.”

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