Cost of living crisis will hit UK consumer spending, retailers warn
Britain’s biggest retailers have warned that soaring living costs will hit consumer spending after a mixed start to the year amid concerns about the Omicron variant.
The British Retail Consortium, which represents more than 5,000 businesses across the country, said soaring household energy prices would mean consumers tightening their purse strings over the coming months, with a knock-on effect on high streets.
It said retailers had enjoyed a strong start to the year as the absence of a January lockdown helped to keep the tills ringing during the first month of 2022, despite a drop in spending on food and drink.
Helen Dickinson, the chief executive of the BRC, said retailers and consumers faced challenges in the coming months.
“Rising inflation, driven by higher costs of production, higher energy and transport prices, as well as other looming price hikes this spring will mean consumers will have to tighten their purse strings,” she said.
According to the latest industry sales snapshot, families prioritised home purchases in January with growth in spending on household appliances, electronics, homeware and furniture. On a total basis, retail sales increased by 11.9% compared with January 2021 and by 7.5% compared with the same month in 2020 before the coronavirus pandemic.
It said there was strong sales growth for footwear, furniture and jewellery, while spending on food and drink, toys and computing all fell in the first month of the year.
Separate figures from Barclaycard showed consumer spending growth slowed in January as the government’s plan B restrictions in England and concerns over high rates of coronavirus discouraged people from heading to shops, pubs and restaurants.
Barclaycard, which processes almost half of UK
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