British shoppers limit spending
Retail sales in the UK dropped in September as the high cost of living continues to pressure households’ budgets, according to the latest sales-monitor report from the British Retail Consortium (BRC) and KPMG published this week.
The survey said that UK retailers reported weak sales last month as cash-strapped consumers avoided big-ticket spending and delayed winter clothing purchases due to unseasonably warm weather.
Although the amount of money Britons spent while shopping rose by 2.7% year-on-year in September, expenditures were down by 4.1% compared to August, figures showed.
“Big-ticket items such as furniture and electronics performed poorly as consumers limited spending in the face of higher housing, rental, and fuel costs,” said Helen Dickinson, CEO of the BRC. “The Indian summer also meant sales of autumn clothing, knitwear, and coats have yet to materialize.”
September marked the second weakest month of the year so far and was well below the inflation rate, indicating the volume of goods sold declined.
Sluggish retail sales have added to concerns over year-end profits, as soaring interest rates squeeze household incomes while the number of jobless is rising in the UK. The downturn in sales comes ahead of the so-called “golden quarter,” the run-up to Christmas when shop owners can make the most of their annual yields.
“The fight for Christmas shoppers will be fierce this year, with promotions likely to be earlier and abundant in a bid to loosen tight household purse strings,” said Paul Martin, UK head of retail at KPMG.
“Consumers will continue to seek out good deals, with price driving purchasing decisions. This is likely to be one of the most important golden quarters that we have seen in years.”
The cost of living crisis in the UK has sent consumption plummeting, while fears of a recession in the country are mounting as successive interest-rate hikes are taking their toll.
The Purchasing Managers Index, a measure reflecting overall economic health, indicated a contraction in August and September, and unemployment has been climbing for three straight months.
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