Period covered: 01 May – 28 May 2022
Note: This report summary is one or two months behind the current month as standard reporting practice. The content is indicative only and incomplete with certain data undisclosed. Become a member to access this data or take out a free 30 day membership trial now.
Homewares sales declined 00% in May on last year, which marks a significant volume decline once inflation is accounted for.
Volumes down as confidence plummets
Slow growth comes as inflation is eroding personal finances, with wage growth unable to keep up with rising prices. Supply chain issues from ongoing disruption amid the Russia-Ukraine war and port issues in China has lead to prices going through the roof.
Inflation among Household Good retailers rose by 00% YoY in May, having faced double-digit increases since February.
As inflation steps up to 40-year highs across the wider consumer basket, confidence has hit further record lows, impacting willingness to spend. Overall consumer confidence declined one point from May to 00 in June.
Evolving spending patterns
Against the highs of last year, ONS data shows that online sales among Household Goods retailers declined 00% YoY, with the proportion of online sales having been broadly stable since the start of the year, accounting for just over a quarter of total sales.
Non-essential spend is going through a turbulent period across different households. The least affluent households saw a sharp 00% decline in their income available for non-essential purchases in May compared to last year according to Retail Economics’ Cost of Living Tracker.
It comes at a time when consumers are approaching their first summer in three years without Covid restrictions, and are focusing their dwindling discretionary income on pent-up demand for other sectors such as travel.
Hospitality and leisure spending increased by 00% YoY in May. Travel spending almost tripled at 00% growth compared to last year.
Despite the energy bill grant announced by the government in May for all households, 00% of households feel they still need to reduce their non-essential spending this year, as rising energy costs are just one area of high inflation.
The cost of servicing debt is likely to increase in the coming months, as interest rates going into June faced a fifth consecutive rise since end of last year.
This will impact mortgage rates and – compared to above-average house moves and consistent double-digit house inflation – the housing market is expected to cool on last year.
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Household Goods inflation at record highs
Source: ONS, Retail Economics analysis