May was a difficult month for UK retail with consumers cutting back on their spending for the first time in almost four years as uncertainty over the economy, the post-Easter dip, and an expected election-linked slowdown all added to the mounting woes.
Physical stores saw their biggest sales fall in over five years, despite the warmer weather that should have given sales a bigger boost. And while online sales rose 6.9 per cent they couldn’t make up for the shortfall. That was particularly a problem for the fashion sector with clothing one of the categories with the biggest sales falls.
Fashion was among the biggest categories to suffer during the month and an online spending rise failed to take up the slack. Consumer spending dipped 0.8 per cent year-on-year last month and dropped 1.9 per cent compared to April.
The effects of inflation and stagnating wage growth seemed to have hit home and with last week’s election results and the start of Brexit negotiations this month June is unlikely to provide much relief to retailers.
Inflation could even worsen as the pound fell further against the dollar and the euro. Business confidence has sunk through the floor. The outlook for consumer spending continues to look relatively bleak, with households facing faster increases in living costs and muted wage growth.