May’s retail results are down to such an extent that some analysts are comparing figures to three years ago to find a source of good news. Despite a return to typical holiday routines, and the build up to the Royal Jubilee, retail sales volumes declined by 4.7% YoY in May. This was the second consecutive monthly decline, as shoppers tightened their belts and focused on only buying the essentials, even in their weekly shop. Sadly the early positive signs for the household goods and department store sectors have failed to continue into the summer, declining 2.3% and 1.1% respectively in the latest results.

It’s unsurprising that consumer confidence is so low; amidst a further rise in inflation, poor performance of the FTSE, supply chain uncertainty, and a looming recession, it seems retailers are struggling to elicit anything other than unavoidable spending from consumers, with discounted holiday fashion the only notable exception. For me, ASDA’s chairman Stuart Rose sums up current consumer sentiment best - sharing how shoppers are now setting £30 spending limits at the tills, down further still from the £40 limits cited by Tesco’s chairman John Allan just a month ago. 

Sadly, whilst retailers will be hoping for a bumper set of results next month, there is little sign of a turnaround. Retailers face the added pressure on supply chains, driven by Covid pressures in China, rail strikes in the UK, and the ongoing Ukraine conflict, coupled with reduced footfall on the high street. Whilst we would hope for an uplift, with inflation showing no sign of reducing, retailers will likely be concerned that this trend might continue throughout the entire summer season.

Ralph will be discussing May's retail figures live with Jim Diamond on LBC News at 13:20 (BST) on Friday 24th June 2022. Click here to tune in.