Recent retail numbers show that shoppers were splurging on new outfits and other items to enjoy the summer weather, boosting overall sales.
After the sun came out in the second half of May, sales volumes rose a stronger-than-expected 0.3%, the Office for National Statistics (ONS) said.
According to the ONS, online retailers and garden centers performed particularly well.
Fuel sales also rose compared to April, but people bought less groceries as prices continued to rise.
“Retail sales rose slightly in May, with online stores doing particularly well selling outdoor items and summer clothing as the sun began to shine,” said Heather Bovill, senior statistician at the ONS.
“Garden centers and hardware stores also posted gains as the good weather encouraged people to start making home and garden renovations.”
Grocery sales fell 0.5% in May. In addition to price pressure, that could also be due to the extra bank holiday last month, the ONS said, as more people ordered takeaway food or hit the pub.
Overall, consumers are still buying slightly less than before the pandemic. But because the prices have risen, they are spending significantly more overall.
Prices are still rising, although inflation – the rate at which they are rising – has fallen to 8.7% in May from over 10% earlier in the year.
On Thursday, the Bank of England hiked interest rates by half a percentage point to 5% in a bid to dampen demand and lower prices. Interest rates have been rising since December 2021, but that doesn’t seem to have a big impact on consumer spending yet.
“UK retail sales were stronger than expected, which could partly justify the Bank of England’s huge rate hike,” said Neil Birrell, chief investment officer at Premier Miton Investors.
“It’s hard to believe that tighter policies won’t have a tangible impact soon, which means the consumer will respond accordingly.”
Online and high-street chocolate chain Hotel Chocolat issued a profit warning on Friday, saying it expects a loss this year and a smaller-than-expected profit in 2024.
The company blamed “continued weakness in consumer sentiment and continued inflationary pressures” for the move.
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