You are here: Home - Household Bills - News -

Consumers cut spending on groceries as cost of living bites

0
Written by: Sarah Davidson
24/06/2022
Retail sales fell 0.5% in May as shoppers spent less on food amid rising prices, figures from the Office for National Statistics showed.

The ONS also revised down its figure for April, with retail sales in the month rising by just 0.4% rather than its previous estimate of 1.4%.

It continues the downward trajectory seen since last summer, with sales volumes down 1.3% over the three months to May 2022 compared to the previous three months.

Aled Patchett, head of retail and consumer goods at Lloyds Bank, said the coming months will “bring further challenges”.

He said: “Retailers are feeling the pinch and face a tricky balancing act.

“On the one hand, transport and raw material costs are driving up prices, while on the other the cost of living squeeze is leading to employees demanding higher salaries and customers re-assessing their purchases to manage budgets.”

Earlier this week the ONS reported that consumer price inflation rose to 9.1 per cent in May, the highest CPI 12-month inflation rate in the National Statistic series which began in January 1997.

The biggest contributor was rising prices for food and non-alcoholic beverages, which the ONS said may explain the 1.6% fall in food sales recorded in May.

A recent report on food inflation by research firm Kantar revealed sales at all the big supermarkets are on the wane as shoppers switched to cheaper alternatives such as Aldi and Lidl and bought more own-label goods in an effort to keep a lid on spending.

Myron Jobson, senior personal finance analyst at interactive investor, said: “Consumers are increasingly making more considered decisions about how they spend their money as the cost-of-living squeeze on finances becomes more acute.

“With inflation expected to hit 11% this year, consumers will likely continue to reshuffle their spending priorities and allocate more of their budget on everyday essentials.”

Consumers spent more on petrol and diesel however, with sales volumes up 1.1% in the month which the ONS said may in part be linked to increased hybrid working and a fall in those working exclusively from home.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

Your rights for refunds if travel is affected by strikes

There have been a wave of strikes this year across many different industries, and more are planned over Christ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week