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The rising cost of living is going to remain the main story for retailers

Paul Martin, UK Head of Retail at KPMG, said:

“For the second month in a row UK retail sales declined, highlighting that consumers are becoming more sensitive to the cost of living.

Non-food purchases related to the home, such as furniture, home appliances and computing, suffered the biggest falls in spending in May.  Online, although still significantly higher than before the pandemic, has now experienced a double-digit decline over the last three months.

There was better news though for clothing, footwear and accessories sales, with both in-store and online purchasing driven up by the approach of the summer season and the promise of outdoor events and travel firmly on many consumers’ radars.

The rising cost of living is going to remain the main story for retailers for the immediate future, with consumer confidence a key factor to watch out for.  Retailers will be hoping that a post-Jubilee and summer feel-good factor begins to improve confidence amongst some shoppers – as presently overall confidence levels are lower than sales may suggest.

Cost and efficiency will firmly be top of agenda for most operators, and understanding how they can protect their margins whilst remaining price competitive for consumers.”