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Cost-of-living crisis: Shoppers rein in spending as consumer confidence falls | business news

The rising cost of living has caused consumers to ‘put the brakes on’ their shopping habits, new figures show.

BRC-KPMG’s latest retail watchdog showed April sales fell after a sharp drop in consumer confidence.

And separate figures from Barclaycard showed that retail and food card spending slowed last month as people tightened their belts.

Helen Dickinson, chief executive of the British Retail Consortium (BRC), said so rising cost of living have “destroyed consumer confidence and curbed consumer spending”.

Data showed that total sales fell 0.3% in April – the first drop in 15 months.

On a like-for-like basis, retail sales in the UK fell 1.7% as shoppers reduced spending on large ticket items.

Ms Dickinson added: “Sales growth has slowed since January, although the true extent of this slowdown has been masked by rising inflation.

“Large ticket items have been hit hardest as consumers curb spending on furniture, electronics and other household goods, exacerbated by delays on goods originating in China.”

But she said there was good news thanks to the April sun.

“Gardening goods and fashion saw stronger sales, particularly occasion wear, as consumers prepared for summer and this year’s wedding season,” she added.

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Non-food sales rose 6.9% in the three months to April compared to the same period last year, driven by higher inflation.

Total grocery sales fell 1.3% over the three-month period.

“Troublesome Times Ahead”

Paul Martin, UK head of retail at KPMG, said as both interest rates and inflation rose and the Bank of England warned of a possible recession, the squeeze on household incomes was having an impact on the high street.

“Against the backdrop of falling consumer confidence, the retail sector faces a bumpy road as it faces mounting cost pressures from all directions,” he said.

Figures from Barclaycard showed that consumer card spending rose 18.1% in April compared to pre-pandemic figures from the same month in 2019.

The data also showed that spending on essentials rose 17.4%, although that represented a slowdown from 18.1% in March due to lower fuel spending.

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Despite the challenging economic environment, spending on hotels, resorts and lodging grew 16.6% compared to three years ago, the fastest growth in this category since September last year.

Takeaways, nightlife and subscriptions all posted slower gains than March as rising prices prompted shifts in consumer behavior.

Jose Carvalho, Head of Consumer Products at Barclaycard, said: “The impact of rising living costs on consumer spending is starting to show, with a number of categories – including subscriptions, takeaways and bars, pubs and clubs – posting slower growth than in March, when the Brits are starting to feel the pinch.

“However, improvements in airlines and travel agents are particularly positive and hopefully point to a rebound in spending on international travel later this year.”

Cost-of-living crisis: Shoppers rein in spending as consumer confidence falls | business news

Source link Cost-of-living crisis: Shoppers rein in spending as consumer confidence falls | business news

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