Asda shoppers are asking till staff to stop scanning and 'put the rest back' when they hit £30, the shop has said. It comes as retail sales fell in May as consumers reined in their grocery spending amid belt-tightening due to the cost-of-living crisis, according to official figures.
The Office for National Statistics (ONS) said the drop in retail sales over the month came after sales tumbled 1.6% across food stores. The ONS also revised down sales growth in April, from the 1.4% previous estimation to an increase of 0.4%.
It found that sales in supermarkets dropped 1.5% over May, with a 2.2% drop in specialist shops such as butchers and bakers. But the biggest decline in spending was seen on alcohol and tobacco, with sales down 4%.
The data likewise showed a pull back in spending on household goods and in department stores, with sales dropping 2.3% and 1.1% respectively, as shoppers worry about affordability. It comes amid mounting signs the cost-of-living crisis is beginning to take its toll on the economy.
Supermarket giant Asda said earlier this week that some shoppers were asking cashiers to stop scanning items when the till total hits £30 to cut costs. Leader of the Asda Group Board and chairman, Lord Stuart Rose, told the BBC: "People are trading back, they are worried about spending. They've got a limit that they've set out, too. They say £30 is one limit and if they get to more than £30 then that's it, stop. It's the same with petrol."
He added that many people won't remember the inflation of the 1970s and the current rise in prices has come as a shock to many. He added: "I'm of the generation that remembers what it was like last time. And once [inflation] gets hold, it's quite pernicious."
Official figures on Wednesday showed inflation has reached a fresh 40-year high of 9.1% and there are fears a large drop in spending by consumers may tip the UK into a recession.
Heather Bovill, deputy director for surveys and economic indicators at the ONS, said: “Feedback from supermarkets suggested customers were spending less on their food shop because of the rising cost of living. More workers returning to the office may have contributed to increased fuel sales this month while shoppers buying outfits for summer holidays helped boost clothing sales.”
“These rises were offset by falls for household goods and department stores, with retailers in these areas reporting consumer reluctance to spend due to affordability worries and higher prices.”
Industry figures from Kantar this week revealed shoppers are set to see their annual grocery bill jump by £380 to £4,960 in 2022 as inflation sends prices rising across the board. The ONS said non-food stores sales were unchanged in May, with a 2.2% increase in clothing sales offset by a fall in household goods.
The data revealed that fuel sales jumped by 1.1% in May, driven by an increase of workers returning to offices. The proportion of online sales slipped back to 26.6% from 27.1% in April as shoppers increasingly returned to stores, but the ONS said this remained “substantially higher than before the pandemic”.
Ralph Robinson, Head of Retail at technology consultancy BJSS, said: “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, in the second consecutive monthly decline, as shoppers tightened their belts and focused on buying only 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, such as on food, with 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 looking hopefully to a bumper set of results next month, there is little sign of a turnaround, as 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 highstreet. 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.”
Lynda Petherick, Retail Lead at Accenture in the UK & Ireland, said: "Today’s slight drop in sales won’t come as a surprise to a sector contending with rapidly rising costs, as well as pressure to keep prices low for struggling households. Inflation remains a key issue for retail businesses, who are having to grapple with growing supply chain costs, as well as keeping their stores afloat and staff well compensated. For consumers, rising costs for staple goods mean many don’t have excess money to spend on discretionary items.
There have been calls to help consumers by keeping prices down, which will be easier said than done for retailers. Increasing costs will have left many firms short this summer, particularly at a time when customers are usually spending more. Retailers with the right technology in place to help keep costs down whilst delivering a good customer and employee experience are more likely to weather the storm than those who don’t."
