Consumer spending continues to fall in May

The number of consumers returning to the high street continued to fall in May, according to data from the British Retail Consortium (BRC) (This is Money).

Data showed a 2.6 per cent decline in footfall in May compared to the same time last year, although this is better than the year-on-year drop of 10.7 per cent in April. High street shops fared better, registering a decline of 1.7 percent, whilst shopping centres fared worst, declining by 2.4 per cent. Separate data from BDO found total sales on the high street grew by 3.4 per cent compared to May last year.

Helen Dickinson, Chief Executive of the British Retail Consortium, said “While total UK footfall remained down on last year, it was a significant improvement on April’s double-digit drop. While the warmer weather initially encouraged more people to the shops, the record-breaking temperatures at the end of the month resulted in a sharp decline in footfall, particularly at Shopping Centres and Retail Parks. Only High Streets bucked the trend, as those who were out and about took the opportunity to pop into their local stores.

“Households remain anxious about the long-term impact of the Iran conflict and inflation and expect prices to rise over the year. By tackling the inflationary pressures on the horizon, Government can help rebuild consumer confidence, ultimately supporting footfall. The first priority must be to address non-commodity charges which are pushing up energy costs to an unsustainable level. The window for Government to act is narrowing, and any delay will only harm retailers and their customers.”

Andy Sumpter, Retail Consultant EMEA for Sensormatic, said “May showed a modest improvement on April’s bleak performance, but retail footfall remains under pressure. Total UK retail visits fell 2.6% year-on-year, reflecting the lingering impact of an early Easter following a difficult April. While brighter weather earlier in the month may have encouraged some shoppers back out, the late May heatwave appears to have done the opposite in the final week.

“Consumer confidence may be edging up slightly, but it remains fragile, with geopolitical uncertainty continuing to weigh on discretionary spend. Shoppers also appear to be changing how they engage with physical retail. While visits to retailers within Shopping Centres fell 3.4%, overall visits to Shopping Centres rose 1.4% — one of the few positives this month — suggesting consumers are still visiting destinations, but making fewer, more considered purchases.

“While May does little to shift the broader narrative of cautious consumers and pressured footfall, it does hint at evolving behaviour rather than outright retreat. For retailers, the challenge and the opportunity lie in converting these more deliberate visits into meaningful spend, by delivering the right mix of value, relevance and experience as we head into the summer months.”