‘Dismal’ month for supermarkets pushes down retail sales

UK retail sales fell sharply last month after “dismal” sales at supermarkets, official figures show.

Sales volumes were estimated to have fallen by 2.7% in May, the biggest monthly fall since December 2023, according to the Office for National Statistics (ONS).

It said there were signs that alcohol and tobacco sales were lower after customers chose to make cutbacks.

Separate figures from the ONS showed that government borrowing rose last month, hitting the second highest level for May since monthly began in 1993.

Borrowing – the difference between spending and tax income – was £17.7bn, up £0.7bn from May last year.

The ONS said revenue from income tax and National Insurance contributions increased, but spending rose by more, partly due to inflation-linked uplifts to many benefits.

May’s fall in sales followed a 1.3% rise in April, when sales were boosted by sunny weather.

The ONS figures show that sales volumes in the three months to May are still up by 0.8% compared to the previous three months, which is seen as a better guide to underlying trends.

However, Paul Dales, chief UK economist at Capital Economics, said the latest figures added to “other evidence that the burst of economic growth” in the early part of the year “is over”.

He said some of May’s decline was due to the boost in April from the warm weather fading, but “the ONS also said retailers noted inflation was prompting consumers to cut back”.