UK consumers feel the pinch from surging inflation: survey

A survey published on Tuesday (7) revealed that shoppers in the UK cut their spending in May by the most since the coronavirus lockdown in early 2021. 

The British Retail Consortium (BRC) said total retail spending was 1.1 per cent lower than a year earlier, the biggest fall since January 2021, the Reuters reported. The decline was 0.3 per cent in April.

BRC chief executive Helen Dickinson has said that retailers are facing tougher trading conditions owing to inflation.

"Falling consumer confidence, and soaring inflation impacting consumers' spending power," said Dickinson.

According to the survey, furniture, electronics and other expensive goods were hit hardest. However, fashion and beauty sales rose in May. 

The BRC said that when compared to only outlets open in May 2021 and now, it showed a 1.5 per cent annual fall in spending after a 1.7 per cent contraction in April. The figures were not adjusted for inflation, which hit 9 per cent in April.

Data from Barclaycard, covering a broader range of spending, showed spending in May was up 9.3 per cent 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 per cent, pushed up by a nearly 25 per cent leap for petrol and diesel which have soared in price. Meanwhile, cut back on spending on digital content and subscriptions was down nearly 6 per cent.

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

Jose Carvalho, head of consumer products at Barclaycard, has said that the cost-of-living crisis is influencing discretionary spending habits.

"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," he said.

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