Shoppers tighten their purse strings

Evidence emerged today that Brits are still struggling with household finances as the Office of National Statistics (ONS) reported that the volume of retail sales in May 2009 fell 1.6% when compared with May 2008.

The ONS has stressed that May 2008 saw an unusually large volume of sales which will have an impact on single year-on-year comparisons. When considered across the three months to May, a 0.6% growth in sales can be observed when compared with the same period a year ago. However, even this comparatively optimistic figure, which replicates last month’s findings, marks the slowest rate of growth since the Christmas period of 1996.

Stores selling mainly food stuffs suffered 0.2% fall in sales volumes while sales at predominantly non-food stores increased by 0.3%. The figures also show that shoppers are spending more on clothing as sales at textile, clothing and footwear stores increased by 7.1%. But shoppers seem to be holding off updating their homes during the recession with sales at household goods stores falling 7.3%.

Commenting on the figures, Richard Lowe, Head of Retail and Wholesale, Barclays Commercial Bank said:

“Retail sales are in a holding pattern. With a slight fall in May and growth in the past three months compared to a year earlier continuing to slow, expectations of a positive increase this month have not been met. However, looking at the numbers over the past nine months evidence suggests that retail sales numbers are moving sideways.”

“Sterling’s continued recovery against the US dollar and the euro sheds a welcome light on the sector for all those who have budgeted to operate beneath the current exchange levels. There are encouraging signs that this will keep having a positive effect later into the year and will ease many concerns of operating under over-cautious expectations.”