Heather Bovill, ONS deputy director, said: “Feedback from supermarkets suggested customers were spending less on their grocery store, due to the rising cost of living.”
April sales growth was also cut sharply from 1.4% to 0.4%, raising the specter of a slowdown in consumer spending tipping Britain into a contraction in the second quarter.
British Retail Consortium surveys suggest conditions in the sector have deteriorated further over the past month.
Martin Beck of EY Item Club said the second half of the year would be a “challenging time for retailers, with consumer purchasing power under significant pressure due to very high inflation and of rising personal taxes, and with confidence continuing to decline.”
He added: “The retail sector is effectively already in recession and the broader consumer sector is expected to experience a marked downturn this year.”
The decline was only marginally better than economists feared, with City’s consensus pointing to a 0.7pc fall.
This comes on top of a string of dire economic numbers for May, which also included higher than expected borrowing and a new 40-year high for headline inflation.