Shoppers cut spending due to rising cost of living
Consumers have “curbed” their shopping habits due to the soaring cost of living, the figures show.
The latest BRC-KPMG Retail Sales Monitor revealed that sales fell in April after a sharp drop in consumer confidence. Separate figures from Barclaycard showed credit card spending for retail and restaurants slowed last month as people tightened their belts.
Data from the BRC and KPMG said total sales fell 0.3% in April – the first drop in 15 months. On a like-for-like basis, UK retail sales fell 1.7% as shoppers cut back on big-ticket items.
Helen Dickinson, chief executive of the British Retail Consortium (BRC), said: “The rising cost of living has shaken consumer confidence and dampened consumer spending. Sales growth has slowed since January, although the true extent of the decline has been masked by rising inflation.
“Big-ticket items have been hardest hit as consumers curb spending on furniture, electrical appliances and other household items, compounded by delays on goods from China. Meanwhile, thanks to sunny April , gardening and fashion items saw stronger sales, especially second-hand clothes, as consumers geared up for summer and this year’s wedding season.
Non-food sales rose 6.9% in the three months to April, compared to the same period last year, driven by higher inflation. Total food sales for the three-month period decreased 1.3%.
Paul Martin, head of UK retail at KPMG, said: “With interest rates and inflation rising and the Bank of England warning of a possible recession, the squeeze on disposable income of households is starting to have an impact on the main street. Amid declining consumer confidence, the retail sector has a tough time ahead as it faces mounting cost pressures from all directions.
Figures from Barclaycard showed consumer spending on cards rose 18.1% in April, compared to pre-pandemic figures for the same month in 2019. The data also highlighted that spending on essential items rose by 17.4%, although this represents a slowdown from 18.1%. in March due to reduced fuel expenses.
Despite the tough economy, spending on hotels, resorts and lodging rose 16.6% from three years ago, the strongest growth in the category since September last year. Takeout, nightlife and subscriptions all saw smaller increases than in March as higher prices drove changes in consumer behavior.
Jose Carvalho, head of consumer products at Barclaycard, said: “The impact of the rising cost of living on consumer spending is starting to be felt, with a number of categories – including subscriptions, takeaways and bars, pubs and clubs – seeing less growth than in March as Britons start to feel the pinch. However, the improvements seen by airlines and travel agents are particularly positive and hopefully point to a recovery in international travel spending later this year.
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