UK shoppers cut spending by most since COVID lockdown in 2021

• Total retail spending was 1.1 percent lower than a year ago, according to the British Retail Consortium (BRC).
• The BRC said its ‘like-for-like’ retail sales indicator, which covers only establishments open in May 2021, showed a 1.5 percent annual decline.
• British shoppers faced by rising inflation curtailed their spending in May by the most since the UK was in a coronavirus lockdown in early 2021.

Total retail spending was 1.1 percent lower than a year ago, according to the British Retail Consortium (BRC), the greatest drop since January last year and an acceleration from April’s 0.3 percent drop.

“It is evident that the post-pandemic spending bubble has burst,” BRC chief executive Helen Dickinson said, “with retailers facing harsher trading circumstances, plummeting consumer confidence, and surging inflation hurting consumers buying power.”
Furniture, electronics, and other high-priced items were hit the hardest, but fashion and beauty sales increased as people prepared for the holidays and summer, according to Dickinson.

After a 1.7 percent decrease in April, the BRC said its ‘like-for-like’ retail sales indicator, which covers only establishments open in May 2021, showed a 1.5 percent annual decline in expenditure.

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Because the data aren’t adjusted for inflation, which hit 9.0 percent in April, the decrease in the volume of products purchased will be much bigger than the decrease in money spent.

According to Barclaycard data, expenditure increased 9.3% in May compared to the same month the previous year, suggesting higher living costs and a rebound in travel and hospitality, which were hit by restrictions last year.

Essential spending increased by 4.8 percent, boosted by an almost 25% increase in the price of gasoline and diesel, which has risen dramatically. As a result,

Furniture expenditure declined by 3.1 percent in May from April, according to Barclaycard, which echoed the BRC figures.

During the month, spending at restaurants and pubs and bars declined by roughly 6% and 1%, respectively.

“The cost of living crunch is certainly affecting discretionary purchasing patterns,” said Jose Carvalho, Barclaycard’s head of consumer products.

“However, there are some promising signals, particularly in the travel industry, as Brits’ hunger for travelling abroad grows as the summer holidays approach.”

Travel spending nearly tripled in May compared to the same month last year, when many international restrictions were in place, and travel agents reported a 24 percent increase in May compared to April.

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