UK Retail Sales Fall as Cost of Living Crisis Hits Food Spending

Retail sales in the United Kingdom fell in May as a result of rising food prices and the country's cost-of-living crisis. The volume of goods sold in stores and online decreased by 0.5 percent, according to the Office for National Statistics on Friday. Economists had predicted a 0.7 percent drop. Sales excluding auto fuel decreased by 0.7 percent.

The failure was caused by a drop in food sales, which the ONS attributed to rising prices. Data released earlier this week showed that overall inflation reached 9.1 percent in May, a four-decade high.

"Feedback from supermarkets suggested customers were spending less on their food shop, because of the rising cost of living," said Heather Bovill, the ONS' deputy director for surveys and economic indicators.

Consumer confidence fell to a record low this month, according to a separate GfK report released earlier Friday, as rising prices, income squeezes, and strike disruption weighed on the national mood. Meanwhile, the Confederation of British Industry reported on Thursday that retailers were also expecting a poor July as inflation eroded consumer willingness to spend.

Taken together, the reports demonstrate the severe economic damage caused by the fastest inflation rate since the 1980s. Consumer finances are being squeezed as wages fail to keep pace with rising prices, leading to a more bleak outlook than during the height of the coronavirus pandemic.