Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

UK shoppers cut spending by most since COVID lockdown in 2021

Published 06/06/2022, 07:37 PM
Updated 06/06/2022, 07:41 PM
© Reuters. FILE PHOTO: A person wearing a face mask shops, as the spread of the coronavirus disease (COVID-19) continues in London, Britain, November 30, 2021. REUTERS/Hannah McKay

© Reuters. FILE PHOTO: A person wearing a face mask shops, as the spread of the coronavirus disease (COVID-19) continues in London, Britain, November 30, 2021. REUTERS/Hannah McKay

By William Schomberg

LONDON (Reuters) - British shoppers facing a surge in inflation cut their spending in May by the most since the country was in a coronavirus lockdown in early 2021, according to a survey published on Tuesday.

The British Retail Consortium (BRC) said total retail spending was 1.1% lower than a year earlier, the biggest fall since January last year and representing an acceleration from April's 0.3% decline.

"It is clear the post-pandemic spending bubble has burst, with retailers facing tougher trading conditions, falling consumer confidence, and soaring inflation impacting consumers spending power," BRC chief executive Helen Dickinson said.

Furniture, electronics and other expensive goods were hit hardest but fashion and beauty sales rose as people prepared for holidays and the summer, Dickinson said.

The BRC said its 'like-for-like' retail sales measure, covering only outlets open in May 2021, showed a 1.5% annual fall in spending after a 1.7% contraction in April.

The figures are not adjusted for inflation - which hit 9.0% in April - which means the fall in volumes of goods purchased will have been much greater than the drop in money spent.

Data from Barclaycard, covering a broader range of spending, showed spending in May was up 9.3% from a year earlier, reflecting the rising cost of living and a bounce for travel and hospitality which were affected by restrictions last year.

Spending on essential items rose by 4.8%, pushed up by a nearly 25% leap for petrol and diesel which have soared in price. In response, consumers cut back on spending on digital content and subscriptions by nearly 6%.

Echoing the BRC data, Barclaycard said spending on furniture fell by 3.1% in May from April.

Spending at restaurants and pubs and bars fell by about 6% and 1% respectively during the month.

"The cost-of-living squeeze is clearly influencing discretionary spending habits," Jose Carvalho, head of consumer products at Barclaycard, said.

© Reuters. FILE PHOTO: A person wearing a face mask shops, as the spread of the coronavirus disease (COVID-19) continues in London, Britain, November 30, 2021. REUTERS/Hannah McKay

"Despite this, there are some encouraging signs, particularly in the travel industry as Brits' appetite for going abroad continues to grow as we approach the summer holidays."

Spending on travel almost tripled from May last year when many international restrictions were in place and travel agents reported a 24% increase in May from April.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.