UK shoppers cut spending by most since COVID lockdown in 2021

By William Schomberg

LONDON (Reuters) – British buyers dealing with a surge in inflation lower their spending in Could by probably the most because the nation was in a coronavirus lockdown in early 2021, in accordance with a survey printed on Tuesday.

The British Retail Consortium (BRC) mentioned whole retail spending was 1.1% decrease than a yr earlier, the most important fall since January final yr and representing an acceleration from April’s 0.3% decline.

“It’s clear the post-pandemic spending bubble has burst, with retailers dealing with harder buying and selling circumstances, falling shopper confidence, and hovering inflation impacting shoppers spending energy,” BRC chief government Helen Dickinson mentioned.

Furnishings, electronics and different costly items have been hit hardest however vogue and wonder gross sales rose as individuals ready for holidays and the summer season, Dickinson mentioned.

The BRC mentioned its ‘like-for-like’ retail gross sales measure, protecting solely retailers open in Could 2021, confirmed a 1.5% annual fall in spending after a 1.7% contraction in April.

The figures will not be adjusted for inflation – which hit 9.0% in April – which suggests the autumn in volumes of products bought can have been a lot better than the drop in cash spent.

Information from Barclaycard, protecting a broader vary of spending, confirmed spending in Could was up 9.3% from a yr earlier, reflecting the rising value of residing and a bounce for journey and hospitality which have been affected by restrictions final yr.

Spending on important gadgets rose by 4.8%, pushed up by an almost 25% leap for petrol and diesel which have soared in worth. In response, shoppers reduce on spending on digital content material and subscriptions by practically 6%.

Echoing the BRC information, Barclaycard mentioned spending on furnishings fell by 3.1% in Could from April.

Spending at eating places and pubs and bars fell by about 6% and 1% respectively throughout the month.

“The associated fee-of-living squeeze is clearly influencing discretionary spending habits,” Jose Carvalho, head of shopper merchandise at Barclaycard, mentioned.

“Regardless of this, there are some encouraging indicators, significantly within the journey trade as Brits’ urge for food for going overseas continues to develop as we method the summer season holidays.”

Spending on journey virtually tripled from Could final yr when many worldwide restrictions have been in place and journey brokers reported a 24% improve in Could from April.

(Reporting by William Schomberg; Enhancing by Andy Bruce)