Cost of Living Crisis: Shoppers ‘hold on’ spending as consumer confidence drops | Business Newsletter

Rising costs of living have forced consumers to put the brakes on their shopping habits, new figures show.

The latest retail monitoring from BRC-KPMG shows that sales fell in April after consumer confidence plummeted.

And separate figures from Barclaycard show that credit card spending on retail and dining slowed last month as people tightened their belts.

Helen Dickinson, chief executive officer of the British Retail Consortium (BRC), said cost of living increases has “strangled consumer confidence and dampened consumer spending”.

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

On a similar basis, UK retail sales fell 1.7% as shoppers reduced spending on big-ticket items.

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

“Big-ticket items were hit the hardest as consumers curtail spending on furniture, electronics and other home appliances, plus delays for goods arriving from China.”

But she says there’s some good news, thanks to the April sunshine.

She added: “Fashion items and garden goods have stronger sales, especially for occasion wear as consumers prepare for this year’s summer and wedding season.

Non-food sales rose 6.9% in the three months to April, year-over-year, due to higher inflation.

Total food sales for the three months fell 1.3%.

‘Tough times ahead’

Paul Martin, KPMG UK head of retail, said with both interest rates and inflation rising and the Bank of England warning of a possible recession, household income Family squeeze is impacting the high street.

“Amid falling consumer confidence, the retail sector has a tough time ahead as they face rising cost pressures from all directions,” he said.

Figures from Barclaycard show that consumer card spending rose 18.1% in April, compared with pre-pandemic figures for the same month of 2019.

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

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Despite the challenging economic backdrop, spending on hotels, resorts and accommodations grew 16.6% from three years ago, the category’s highest growth since last September.

Trips, night outs and subscriptions all saw smaller gains compared to March as rising prices led to a change in consumer behaviour.

Jose Carvalho, head of consumer products at Barclaycard, said: “The impact of the rising cost of living on consumer spending is starting to show, with a number of categories – including including subscriptions, takeout and bars, pubs and clubs – there was less growth in March as Britons started to feel pinched.

“However, the improvements seen by airlines and travel agents are particularly positive and will hopefully indicate a recovery in spending on international travel later this year.”