Retail sales fall as cost of living crisis bites
By Abigail Townsend
Date: Tuesday 10 May 2022
(Sharecast News) - UK retail sales fell in April, industry research showed on Monday, as the mounting cost of living crisis started to bite.
According to the latest BRC-KPMG Retail Sales Monitor, like-for-like sales fell 1.7% in the four weeks to 30 April compared to the same period a year previously, when they increased 39.6%. On a total basis, sales decreased 0.3%. It was the first decline in sales for over a year.
Food sales decreased 1.3% in the three months to April, or by 1.8% on a like-for-like basis. Non-food sales increased by 1.8% or 6.9% on a total basis, although that remains well below the 12-month total average for growth of 11.1%.
In addition, the British Retail Consortium noted that as sales figures were not adjusted for inflation, the small drop in sales would have masked "a much larger drop" in volumes once inflation was accounted for.
Helen Dickinson, chief executive of the BRC, said: "The rising cost of living has crushed consumer confidence and put the brakes on consumer spending. Sales growth has been slowing since January, though the real extent of this decline has been masked by rising inflation."
Big ticket items were hit the hardest in April as consumers cut spending on furniture, electricals and homeware. Garden goods and fashion fared better, with demand fuelled by the warmer weather.
Dickinson continued: "Customers face a difficult year. Further headwinds are incoming, such as rising global food prices, which rose 13% between March and April."
Paul Martin, UK head of retail at KPMG, said: "The cost of living crisis came home to roost for retailers in April, with sales going into decline for the first time in 15 months.
"With interest rates and inflation rising and the Bank of England warning of a possible recession, the squeeze on disposable household income is starting to have an impact on the high street. Against a backdrop of falling consumer confidence, the retail sector has a bumpy time ahead as they face spiralling cost pressures from all directions.
"Many retailers will have no choice but to raise prices to protect margins, but the longer we see high inflation and real household incomes falling, the more likely it is that consumers will change their spending behaviour."
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