A sharp fall in demand for groceries, as pubs and restaurants reopened to indoor customers, has driven a decline in retail sales volumes.
The Office for National Statistics charted a surprise 1.4% fall in retail sales between April and May.
Economists had predicted growth of 1.6% on the back of a 9% surge the previous month following an easing of COVID-19 restrictions that released pent-up demand for goods on the high street.
The fall in grocery volumes was backed up by separate figures from Tesco, the UK’s largest supermarket chain, which noted a decline in sales for meals at home during April and May in its first quarter results statement.
The retailer, which like its rivals has been among those shielded from pandemic sales pain, still reported like-for-like UK sales growth of 0.5% over the period against the tough comparison of the same three months to May in 2020.
Commenting on the wider performance for the retail sector as a whole, ONS director of economic statistics, Darren Morgan, said: “
“Following a sharp increase last month coinciding with post-lockdown reopening, retail sales dipped slightly in May.
“However, they remain well above both their pre-pandemic levels and those seen in March before shops reopened.
“Food stores sales suffered as feedback suggested the reopening of hospitality meant consumers took advantage of eating out instead.
“Household goods stores and garden centres fared well as people spent money on improving their gardens in anticipation of the summer and the lifting of restrictions on outdoor gatherings.
“As customers returned to physical stores, online sales fell in May for the third consecutive month, but remain nearly 60% higher than the level seen in February 2020.”
In Tesco’s case, it reported revenue of £12.4bn – a rise of 1.3% on a like-for-like basis compared to the first quarter last year – and said it represented growth of 8.7% by the same measure on March-May 2019.
It reported a rising contribution from its Booker wholesale operation – thanks to hospitality reopening – and said a sales decline in Ireland reflected a strong comparison with a year ago as the country entered lockdown rather than any Brexit-related hit.
Chief executive Ken Murphy told investors: “Our profit guidance from April remains unchanged.
“While the market outlook remains uncertain, I’m pleased with the strong start we’ve made to the year and continue to be excited about the many opportunities we have to create value over the longer term.”
A note to clients by Jefferies Equity Research said of the performance: “Resilient UK industry grocery sales and notable improvements at Booker have helped Tesco enjoy two-year stacked sales growth accelerating from the already strong levels seen at the end of 20/21.
“Despite the lack of formal guidance upgrade in this sales update, the upbeat start to the year suggests that guide for 21/22 retail profits similar to 19/20 could be bettered as the year progresses.”
Members of scandal hit-CBI begin confidence vote on lobby group’s future
CBI members are to begin voting today on the future of the business lobby group, following a series of scandals.
The organisation was plunged into disarray after claims of serious sexual assault were made by CBI employees against colleagues.
Today it will launch what it describes as an “ambitious ‘programme of change'”, with adjustments to its governance, culture, people processes, and refinement of its core purpose.
More than 1,000 business leaders were asked for their thoughts on the organisation’s future in surveys, focus groups, and listening sessions across the UK.
The results of the confidence vote will be revealed at an extraordinary general meeting (EGM) on 6 June.
Rain Newton-Smith, CBI director general, said “radical and rapid changes” were being made, with the organisation “well on the road to recovery”.
She added: “Our society faces serious challenges from a cost of living crisis to climate change, with an urgent need to create truly sustainable growth across regions and nations of the UK, as well as on the global stage.
“We need a strong voice of business, backed by a depth of economic analysis and insights from across the whole economy and entire country.
“A renewed CBI can once again have a voice on the serious economic challenges the UK faces, with a general election approaching at pace.
“The CBI has a unique role.
“We will work in collaboration and partnership with our members on these shared challenges, which is why this programme of change is so important. There is not a moment to lose.”
Sky News revealed earlier this month that the CBI had drafted in Principia, a business ethics consultancy, to aid a review of its culture.
This week, Sky’s City editor Mark Kleinman reported that the CBI’s board had drafted in lawyers to prepare for a prospective insolvency filing.
In April, the UK’s biggest business group suspended most of its activities pending the outcome of a review by law firm Fox Williams – Ms Newton-Smith said on Wednesday that the recommendations from this review have all been “either completed or (are) in progress”.
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But some members decided the damage was already done, and suspended or ended their membership. Among those companies to quit were the Association of British Insurers, BMW Group, Aviva, and the British Beer & Pub Association.
It was all sparked by allegations made by at least a dozen female CBI employees against some of their male colleagues, which included claims of rape, stalking and harassment.
A number of the allegations are being investigated by the City of London Police.
Longer lorries allowed on Britain’s roads despite fears over risks to pedestrians and cyclists
Longer lorries are now allowed on Britain’s roads to enable more goods to be carried on fewer journeys.
This is despite fears about the risks for pedestrians and cyclists as the vehicles have a larger tail swing – meaning their rear end covers a greater area when turning – and extended blind spots.
Lorry trailers up to 61ft (18.55m) long – some 6ft 9in (2.05m) longer than the standard size – are allowed to be used from 31 May.
The DfT has previously said the new lorries will be able to move the same volume of goods as current trailers in 8% fewer journeys.
New laws to allow longer lorries on UK roads ‘could cost lives’ of pedestrians and cyclists
The policy is expected to generate £1.4n in economic benefits and take one standard-size trailer off the road for every 12 trips.
An 11-year trial of longer lorries has demonstrated they are safe for use on public roads, according to the DfT.
The study found they were involved in “around 61% fewer personal injury collisions than conventional lorries”, the department said.
A Government-commissioned report published in July 2021 revealed that 58 people were injured in incidents involving longer lorries between 2012 and 2020.
Roads minister Richard Holden said: “A strong, resilient supply chain is key to the Government’s efforts to grow the economy.
“That’s why we’re introducing longer semi-trailers to carry more goods in fewer journeys and ensure our shops, supermarkets and hospitals are always well stocked.”
Road deaths rise to more than 1,500
Lorry left hanging off bridge after M1 crash
However, some organisations are concerned at the move – including Cycling UK.
Its campaigns manager Keir Gallagher said at the time of the government’s decision: “At a time when funding for infrastructure to keep people cycling and walking safer has been cut, it’s alarming that longer and more hazardous lorries could now be allowed to share the road with people cycling and walking.
“Before opening the floodgates to longer lorries rolling into our busy town centres and narrow rural lanes, further testing in real life scenarios should have been done to assess and address the risks.”
Rail strikes to cause more disruption with walkouts affecting FA Cup final and Epsom Derby
Rail passengers are set to suffer fresh travel disruption over the next few days due to more strikes in long-running disputes over pay, jobs and conditions.
Train companies are warning that services will be “severely reduced” because of industrial action by drivers and other workers.
Members of the drivers’ union Aslef will walk out on Wednesday and 3 June, while the Rail, Maritime and Transport union (RMT) has called a strike on 2 June.
Passengers are being advised to plan ahead and check the times of first and last trains.
Read more on train strikes:
Which services will be affected by industrial action this week?
Mick Whelan, general secretary of Aslef, told the PA news agency there was “no waning in enthusiasm” from train drivers to continue taking industrial action.
He said: “We are determined to get a resolution and remain in this for the long haul.
“It is time for the government to step back from interference which is preventing a deal – drivers, in line with other workers, deserve a pay rise after four years without one and inflation running over the last 12 months north of 10%.”
The strikes will affect 15 train companies, with services due to start later and finish much earlier than usual – typically between 7.30am and 6.30pm.
On the RMT strike day, around half of the network will shut down, with around 50% of normal services running.
On Aslef strike days, around 40% of trains will be running but there will be wide regional variations, with some operators running no services at all.
It is likely that evening services on some lines will be affected on the days before each strike and the mornings following strikes.
Aslef will also start an overtime ban at 15 train operating companies on 1 June that could cause disruption, especially in and out of London.
The industrial action will affect football fans travelling to London for the FA Cup final between Manchester City and Manchester United on Saturday at Wembley Stadium.
Fans wishing to travel to the game by train from Manchester have been advised not to attempt to do so on the day.
There will be a limited service on Friday due to the RMT industrial action.
A Rail Delivery Group (RDG) spokesperson said: “The upcoming rail strikes called by the Aslef and RMT leadership will not only affect our passengers’ daily commute but will also impact those travelling to and from the FA Cup final and other events across the country, causing disappointment and frustration for tens of thousands of people.
“It will also inconvenience families who have been looking forward and have planned their half-term holidays. It will also further burden our people who have already lost thousands of pounds at a time of financial strain.”
Number of days lost to strike action in 2022 highest since 1989
The unions say they have not been given a pay offer it can recommend to their members and support for industrial action remains strong among workers as well as the public.
Aslef says train drivers have not had a pay rise for four years.
Both unions claim the government is preventing the train companies making an acceptable offer, which ministers deny.
A Department for Transport spokesperson said: “The government has facilitated a fair and reasonable pay offer, now union leaders must do the right thing and put this to their members.”
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