LONDON (ShareCast) - UK retail sales tumbled 0.6% last month versus forecasts for an increase in spending as the recession and fears about job security kept consumers away from the shops.
Figures from the Office for National Statistics also revealed
a 1.6% drop in sales on the same time last year.
Analysts had predicted a rise of about 0.4% for May following the 0.9% increase reported a month earlier, and a 0.2% decline in the annual rate due to last year's strong comparisons.
Monthly sales volume for food stores fell 1.3% year-on-year, but non-food outlets sank 3%, the biggest fall since the 3.3% reported in July 1992.
Household goods stores were the worst hit within the non-foods sector, slumping 6.5% versus May 2008. Clothing and footwear slipped 2.2%.
Total sales volume in the three months to May was up 0.6% on a year ago, but that equals the lowest growth since December 1995.
The seasonally adjusted value of retail sales for the three months to May rose 1.3% year-on-year, but fell 1.1% in the month of May versus the same time in 2008.
Howard Archer, chief UK economist at IHS Global Insight, says the extent of the fall in May raises "serious concern" about the state of consumer spending.
"After a flurry of improved data and survey evidence on the UK economy, the marked fall in retail sales in May is a reality check that the UK economy is still in a very fragile state and serious obstacles remain to sustainable recover," Archer adds.
He thinks consumer spending will be "muted" for some "considerable" time to come, which will limit growth.
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