Press Room
Rising food and petrol prices continue to hurt shoppers but
retial sales volumes increase in May
If you are writing on today's ONS Retail
Sales statistics, please consider the following comment from David
Bush, Head of Grant Thornton's Retail Services Team.
According to today's monthly ONS retail sales
statistics, the value of retail sales made by food stores rose by
7.8% over the last 12 months, the largest increase in retail food
sales since May 2001. This significant rise in the value of food
sales is largely due to the large increases in basic food prices
which are now being reflected in price increases at the till.
"Today's retail results clearly illustrate the
burden of increasing food prices on shoppers who are beginning to
react by trading down and looking for discounted products when they
wouldn't have done so previously. This is clear evidence of price
inflation coming through and is not a healthy sign for future
consumer spending," says David Bush, Head of Retail Services at
Grant Thornton.
Overall retail sales volumes also increased in
the last three months and were 5.4% higher than the same period a
year ago Therefore this is largely due to the large amount of
discounting that has occurred in stores and is likely to translate
into reduced gross margins for retailers.
Today's announcement also highlighted that
sales volumes for non-store retailing increased over the last three
months year on year by 16.9%, significantly more than the other
sales categories' increases. Internet retailers are clearly bearing
up better than high street retailers. This is due at least in
part to shoppers reducing trips to stores as a result of petrol
price increases.
"There is clear evidence that the reduction in
consumers' disposable income - caused by rising food, petrol
prices, domestic fuel bills and falling personal housing equity
balances - is beginning to severely impact retailers' sales despite
the superficially positive nature of this month's figures," Bush
concludes.