Cost of living crisis slows UK consumer spending, but holiday bookings take off | Retail business

Soaring UK living costs and a record rise in household energy bills last month have dampened consumer spending, according to figures from the retail sector.

However, according to separate data, April was the biggest month for international travel spending since before the pandemic, as Britons took advantage of the easing of Covid restrictions to book holidays abroad.

Figures from the British Retail Consortium (BRC) show total retail sales in the UK fell 0.3% in April as consumers tightened their belts. Spending on big-ticket items, including electrical appliances, furniture and household items, was particularly hard hit.

Reflecting the overall decline in spending, the decline in total sales in the four weeks to April 30 compared to a three-month average growth rate of 3.2% and a 12-month rate of 6.4%.

But separate data from Barclaycard showed improvements in travel spending and international holiday bookings. The credit provider, which processes nearly half of all card transactions, said consumer spending rose 18.1% in April as airlines and travel agents saw the best month since April. start of the pandemic two years ago.

Spending on hotels, resorts and lodging rose 16.6% from the same month in 2019, the category’s strongest growth since September last year, reflecting the weekend rush at Easter and a rush in bookings for summer vacation.

But Barclaycard said spending on essentials rose slightly less than in March due to a slight reduction in petrol consumption, a sign that Britons are looking to save money on fuel and electricity. grocery store.

Highlighting the hit from rising energy bills in April, average utility spending per customer rose 28.8%, while Barclaycard said up to nine in 10 people were concerned about the impact from the increase in household bills on their finances.

According to the BRC, food sales fell 1.3% in the three months to April, compared to a 12-month average growth rate of 0.7%. As apparel and footwear sales continued to rise, consumers held back on non-essential spending, with technology and home goods being the hardest hit by spending cuts.

The BRC said the April sunshine helped boost sales of fashion and gardening items, including outfits for special occasions such as weddings.

The Bank of England warned of the growing danger of a recession, with inflation expected to peak above 10% later this year, and Helen Dickinson, chief executive of the BRC, said households were facing a difficult year ahead.

“The rising cost of living has shaken consumer confidence and dampened consumer spending,” she said. “Other headwinds are coming, such as rising global food prices, which rose 13% between March and April. Retailers will continue to do all they can to mitigate the effects of these cost increases, but unfortunately they cannot absorb them all.

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