Retail sales in Great Britain fall as people focus on dining out

Economists had forecast a 1.6% rise in May but drop in food shopping affects figures

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Last modified on Fri 18 Jun 2021 03.55 EDT

Retail sales across Great Britain fell 1.4% last month as the government’s loosening of pandemic restrictions led to a drop in food shopping and an increase in eating and drinking in restaurants and bars.

The Office for National Statistics said that the dip followed an exceptionally strong April, when sales rose 9.2%, as shoppers returned to the high street en masse when non-essential retailers reopened after a near four-month shutdown. Economists had forecast a 1.6% rise in sales in May.

“Following a sharp increase last month coinciding with post-lockdown reopening, retail sales dipped slightly in May,” said Darren Morgan, the director of economic statistics development at the Office for National Statistics. “However, they remain well above both their pre-pandemic levels and those seen in March before shops reopened.”

The largest contribution to the decline in May came from food stores, where sales volumes fell by 5.7% month on month, with the public ditching supermarkets in favour of going out.

“Food stores sales suffered as feedback suggested the reopening of hospitality meant consumers took advantage of eating out instead,” Morgan said.

Meanwhile, there was an overall 2.3% increase in sales at non-food stores. This was fuelled by the home improvement boom, which drove a 9% increase in purchases at household goods stores, such as hardware and furniture retailers. There was also a 7.7% rise in sales at “other” non-food stores, as the public looked to spruce up their gardens for summer entertainment.

“Household goods stores and garden centres fared well as people spent money on improving their gardens in anticipation of the summer and the lifting of restrictions on outdoor gatherings,” Morgan said.

However, Lisa Hooker, a consumer markets leader at PwC, said consumer shopping patterns are not benefiting all retail locations.

“The headline figures mask a divergence of fortunes between different retailers,” she said. “We have already seen that the recovery in footfall is skewed more heavily towards out-of-town retail parks rather than high streets and traditional shopping centres. And footfall will remain depressed until the full lifting of lockdown restrictions, currently postponed until July.”

The reopening of stores led to a drop in online retail sales in May, with the exception of food stores. Online sales accounted for 28.5% of total retail sales in May, down from 29.8% the previous month.

“As customers returned to physical stores, online sales fell in May for the third consecutive month but remain nearly 60% higher than the level seen in February 2020,” Morgan said.

The relaxing of domestic travel and holiday restrictions led to a 6.2% increase in automotive fuel sales month on month in May.

Lynda Petherick, the retail lead for Accenture UK and Ireland, said summer sales should still be strong despite the government’s decision to postpone the full relaxation of coronavirus restrictions by a further four weeks.

“While the recent postponement of the so-called freedom day will come as a disappointment to some, and foreign travel restrictions remain in place, we should still see demand for new wardrobes and household consumer goods as people prepare for UK summer staycations,” she said.

Total retail sales remain 9.1% higher than pre-pandemic levels, although in-store sales were 1.3% lower.

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