interactive investor comments on ONS figures for retail sales
16th September 2022 07:54
by Myron Jobson from interactive investor
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Rapid price increases curtailed spending appetite during a key month for back-to-school spending and discounted seasonal stock.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “While shoppers may have had extra wiggle room in their budgets because of a fall in the cost of fuel from record highs, rapid price increases elsewhere has curtailed appetite to spend.
“Sales volumes in all of the main sectors - food stores, non-food stores, non-store retailing and fuel - fell over the month for the first time since July 2021, when all legal restrictions on hospitality were lifted.
“We spent less at non-food stores in August than any other category – sales were down 1.9% over the month and were 2% below their pre-Covid levels. Despite August being a key month for back-to-school spending and discounting seasonal stock to make way for new products, clothing stores sales volumes fell by 0.6% last month and were 5.7% below their pre-Covid levels. Other non-food stores such as sports equipment and toy stores reported a monthly fall in sales volumes of 2.8% and 2.7% for department stores.
“Many shoppers still feel that now is not the best time to make big purchases such as furniture, illustrated by a 1.1% dip in household goods stores sales.
“The soaring cost of food has been difficult to stomach for many consumers, with the cost of putting meals on the table taking an ever-bigger bite out of pay packets. Food store sales volumes fell by 0.8%.
“Rampant inflation, which continues to outpace wage growth, means we are spending more to receive the same amount of goods and services than we did a year ago. This has forced many shoppers, especially those at the lower end of the income spectrum, to cutback on spending on nice to have items to afford the soaring cost of everyday essentials.
“Consumer confidence has suffered its biggest fall since the early days of the pandemic according to a study by YouGov and the Centre for Economics and Business Research, with concerns about the pace of price increases at the forefront for households. High inflation means that many shoppers will continue to reshuffle their spending priorities to weather the cost-of-living storm.”
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