Retail sales slow as Brexit-related inflation bites
Retail sales slowed in May to the lowest annual growth since April 2013 as shoppers begin to feel the impact of price inflation, according to the late Retail Sales bulletin from the Office for National Statistics.
The headline figures show that the quantity of goods bought in the retail sector increased by 0.9% compared with May 2016, marking the lowest annual growth rate since April 2013.
Concurrently, average store prices increased by 2.8% on the year, the largest single month hike since March 2012, while value and volume on the previous month were down -1.2% and -1.6% respectively.
Consumers are now facing a tough combination of post-election depreciation of sterling compounding by earlier rising costs that have begun to feed through from the prolonged post-referendum slump in the pound.
Ole Black, senior statistician at ONS, confirmed: “Increased retail prices across all sectors seem to be a significant factor in slowing growth.”
Non-food retail has seen the biggest slowdown, while supermarkets have been battling hard to keep food and drink prices as competitive as possible for their customers.
However, prices across the food and drinks sector have also been forced to rise as suppliers edge prices up to protect already slender margins, with retail prices up by an average of 2.6% across this £3.1 billion a week trade.
Most suppliers in the drinks trade have already passed on price increases to their accounts, with increases on lists of 3% to 5% introduced by many earlier this year, with further rises on the cards for most companies unless there is some easing of the exchange rate.
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