By David Milliken
LONDON (Reuters) - British shoppers cut back on spending for the third month in a row and sales volumes fell by the most since they were hit hard by the COVID-19 pandemic as surging inflation squeezed the economy, an industry survey showed on Tuesday.
The British Retail Consortium said the value of total sales at its members - mostly large chains and major supermarkets - was 1.0% lower in June than a year ago, compared with a 1.1% fall in May.
Like-for-like sales, which adjusts for changes in floor space and shops closed due to lockdown restrictions, fell 1.3%.
However, the figures are not adjusted for inflation and the BRC said shoppers were trading down to cheaper brands of food and other goods, as well as postponing purchases of kitchen appliances and homeware.
"Sales volumes are falling to a rate not seen since the depths of the pandemic, as inflation continues to bite and households cut back spending," BRC chief executive Helen Dickinson said.
Britain's surging cost of living has prompted pledges of tax cuts from most contenders to succeed Boris Johnson as prime minister. The Bank of England has promised to act "forcefully" on inflation if needed but it must also gauge how much the economy is already slowing.
The BRC's measure of inflation among its members rose to the highest since 2008 in June, at 3.1%, while the official consumer prices index - which includes a wider range of goods and services - hit a 40-year high of 9.1% in May.
The BRC said food sales got a temporary lift from an extended public holiday in early June to mark Queen Elizabeth's 70 years on the throne, and clothing sales also enjoyed a seasonal boost, but there were broader headwinds.
The most recent official data showed retail sales volumes, excluding vehicle fuel, fell 5.7% in the year to May.
Separate figures from payments processor Barclaycard on Tuesday showed consumer spending in June was 6.2% higher than a year earlier, pushed by a nearly 40% jump in spending on utilities.
"Consumers are having to budget and seek out value where they can for both essential and non-essential purchases," Barclaycard's head of consumer products, Jose Carvalho, said.
One area where Britons did spend was at the cinema. The films "Top Gun: Maverick" and "Jurassic World Dominion" brought a 5.3% month-on-month rise in takings, while spending on streaming services dropped 4.2% from May.
(Reporting by David Milliken; Editing by William Schomberg)