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PwC comments on May 2022 ONS retail sales figures

24 Jun 2022

Commenting on the Office of National Statistics retail sales figures for May 2022,

Lisa Hooker, Industry Leader for Consumer Markets at PwC, said:

"Despite some recovery in high street footfall, the exuberance in the run up to the Platinum Jubilee celebrations and the sunny weather, all of these positives were unable to outweigh the wider drag of the cost-of-living crisis on retail sales.

"No matter whether comparing with last month or last year, including or excluding petrol sales, retail sales volumes declined, showing the pressures on consumers’ wallets. And, while pound note value sales increased, this was predominantly a result of inflation.

"Grocery sales were the biggest drag on retail sales performance last month. This may be surprising, given weaker comparisons from last year and coming 12 months after the full opening of hospitality following the end of the third national lockdown in 2021. However, with this week’s record inflation figures particularly driven by food and drink prices, there are already signs that consumers are cutting back and trading down in their supermarket trolleys.  And even the restaurant and pub recovery appears to have stalled, with further headwinds this week given the national strikes.

"The one bright spot was clothing sales, as consumers refreshed their wardrobes for much postponed holidays and events over the summer. Other non-food categories such as spend on the home performed less well, as non-essential purchases continue to be put off.

"Online sales also continued to fall back from its pandemic highs, now falling to just 26.6% of retail sales, compared to almost 38% at its peak. While still significantly higher than pre-pandemic levels, it did provide some respite for the high street, with footfall recovering to some extent.

"Looking ahead, even the bright spots in this month's retail sales appear both discretionary and temporary. Falling confidence and accelerating inflation in non-discretionary spending areas like utilities and food will further limit consumers’ ability to spend as the year progresses. Without further government assistance, the rest of 2022 is looking increasingly bleak for the retail sector.”

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