Data: Consumers ‘put the brakes on’ spending as cost of living surges

Consumers have “put the brakes” on spending as they cut back on their grocery shopping and other essential retail activity while the cost of living continues to surge, according to the latest data.

The latest BRC-KPMG retail sales monitor revealed that sales dipped last month, following a sharp downturn in consumer confidence. The 0.3% drop is the first decline in total sales in the past 15 months.

Separate figures from Barclaycard also showed that credit card spending slowed last month as consumers cut back on their usual shopping habits.

“The rising cost of living has crushed consumer confidence and put the brakes on consumer spending,” said the British Retail Consortium (BRC)’s chief executive, Helen Dickinson.

“Sales growth has been slowing since January, though the real extent of this decline has been masked by rising inflation.

On a like-for-like basis, UK retail sales dropped by 1.7% as shoppers reduced their spending, while total food sales for the three-month period fell by 1.3%.

Read more: Lidl named UK’s cheapest supermarket for the fourth month in a row

Paul Martin, UK head of retail at KPMG, said: “With interest rates and inflation rising and the Bank of England warning of a possible recession, the squeeze on disposable household income is starting to have an impact on the high street.

“Against a backdrop of falling consumer confidence, the retail sector has a bumpy time ahead as they face spiralling cost pressures from all directions.”

The figures from Barclaycard showed that – while consumer card spending increased by 18.1% in April (compared with pre-pandemic figures in 2019) – spending on essential items slowed down, largely due to a reduction in petrol usage and families looking to save money on groceries.

Average card spending on utilities grew by almost a third (28.8%), with nine out of every ten shoppers concerned about the impact of rising household bills on their finances.

As a result, takeaways, nights out and subscriptions all saw less growth as rising prices led to changes in consumer behaviour.

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 seeing less growth than in March as Brits begin to feel the pinch.”

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