Brits hit by the cost of living crisis are cutting back on shopping from clothes and furniture to essentials like food, latest data shows.
Shoppers are being forced to choose more carefully how to spend their money as real wages don’t keep pace with inflation and the knock on effect is that retail businesses are seeing a notable drop in sales.
While the decline in retail sales slowed last month, down by 0.1%, this was largely down to the boost in food trade as people celebrated the Queen’s Platinium Jubilee, and in May it dropped by 0.8%, according to the Office for National Statistics (ONS).
The volume of items bought in June was down 6% on last year.
Heather Bovill, ONS deputy director for surveys and economic indicators, said: "After taking account of rising prices, retail sales fell slightly in June and although they remain above their pre-pandemic level, the broader trend is one of decline.
"After a fall in May, food sales picked up due to the jubilee celebrations, but this was the only sector to report an increase."
Food store sales volumes increased by 3.1%, picking up following a recent downward trend for the sector as more people returned to restaurants and pubs following the easing of pandemic restrictions.
In previous months, retailers had highlighted a decline in volumes because of the increased cost of products and pressure on household bills.
Ms Bovill suggested "concerns around affordability" had more of an impact on demand for clothing and household goods.
Sales at non-food stores dropped by 0.7% for the month, driven by a 4.7% drop in sales volumes at clothing stores, while household goods were down 3.7%.
Fuel sales also saw a particularly sharp drop for the month, falling 4.3% in response to a record jump in petrol prices in June.
The sales decline was the biggest since October last year, when labour shortages and supply constraints led to shortages at forecourts across the UK.
Helen Dickinson, chief executive of the British Retail Consortium (BRC), said: "The cost-of-living crunch caused by record inflation continue to damage consumer confidence and stifle household spending.
"Discretionary spending and particularly bigger purchases were put off as consumers become increasingly concerned about the future."
Meanwhile, GfK's long-running Consumer Confidence Index languished at a historic low of minus 41 in July, despite a two-point uptick in hopes for personal finances over the next 12 months.
Confidence in the general economic situation over the last 12 months fell one point to minus 66, 23 points lower than July last year, but expectations for the coming 12 months remained at minus 57, 52 points lower than 12 months ago.
The Major Purchase Index, a measure of confidence in buying big ticket items, rose one point to minus 34, 36 points lower than this month last year.
Joe Staton, client strategy director at GfK, said: "Consumer confidence remains severely depressed this month as the impact of soaring food and fuel prices and rising interest rates continues to darken the financial mood of the nation.
Deloitte separately found the rising cost of living has driven consumer confidence below the previous record set during the lockdown of March 2020 to an all-time low.
Rising inflation forced Deloitte's latest Consumer Tracker, compiled immediately following the UK's interest rate rise to 1.25%, to minus 19% in the second quarter, with consumers most pessimistic about their household disposable income.
Additionally, 62% of consumers are now spending more, compared to 49% this time last year. Of these, 86% say their increased spending is specifically due to higher prices.
Celine Fenech, consumer insight lead at Deloitte, said: "With inflation going up faster than average earnings, there are now more consumers feeling the cost-of-living pinch than not. In a sign of the times, the biggest jump in spend this quarter is on energy and housing costs, including rent and mortgages.
"The current situation means consumers are significantly changing their spending behaviours to adapt. This might be by simply buying less, switching to cheaper brands or stores, and postponing major purchases. Some are also seeing an opportunity in reselling and purchasing second-hand goods."
