Retail sales in the UK have dropped at a rate “not seen since the depth of the pandemic” as rampant inflation forces consumers to slash discretionary spending, a report has found.
As households reined in spending, total retail sales dropped by 1 per cent in June — the third fall in a row as the cost of living takes its toll on consumers, the British Retail Consortium said
Many shoppers downgraded to cheaper brands or cut items from their grocery lists completely, the report by the BRC and KPMG consultancy found.
The trade association’s measure of retail sales declined by 1.3 per cent from a year ago in the period through to July 2. This followed a 1.5 per cent drop the month before.
“Sales volumes are falling to a rate not seen since the depths of the pandemic,” Helen Dickinson, chief executive of the BRC, said.
Almost half of consumers have begun to reduce energy and water consumption to cope with rising bills.
Utility costs have soared 40 per cent from a year ago, according to Barclaycard, which published a separate report. That means less money for other items.
Even a boost from the queen’s platinum jubilee celebrations failed to offset the slowdown in spending.
“Discretionary purchases were hit hard, especially white goods and homeware, while consumers also traded down to cheaper brands in food and non-food alike,” Ms Dickinson said.
“While the jubilee weekend gave food sales a temporary boost, and fashion sales benefited from the summer holiday and wedding season, this was not enough to counter the substantial slowdown in consumer spending.”
Inflation has already hit a 40-year high of 9.1 per cent and is set to soar past 11 per cent in the autumn, as the energy price cap is set to be increased once more.
The BRC is calling on the government to help the retail sector by taking action to lower business rates as firms face being “caught between significant rising costs in their supply chains and protecting their customers from price rises”.
The sales monitor data showed non-food retail sales have suffered the most amid the cutback on discretionary spending, down 3.3% on a total basis in the three months to June and 4.2% lower on a like-for-like basis.
Barclaycard, which manages about a third of the credit and debit card purchases in the UK, said spending in supermarkets fell 0.8 per cent from a year earlier while outlays on essentials increased by 4.4 per cent. It found spending on non-essentials slowed sharply.
“The outlook continues to be challenging, although good weather might provide a welcome boost in July,” said Susan Barratt, chief executive of research company IDG, which contributed to the survey. “We’re forecasting that food inflation will reach 15 per cent this summer.”
Gabriella Dickens, senior UK economist at research consultancy Pantheon Macroeconomics, said that while the immediate picture shows belt tightening, consumer spending should strengthen later this year.
Groom and Two Brides
Director: Elie Semaan
Starring: Abdullah Boushehri, Laila Abdallah, Lulwa Almulla
Rating: 3/5
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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5
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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Top investing tips for UAE residents in 2021
Build an emergency fund: Make sure you have enough cash to cover six months of expenses as a buffer against unexpected problems before you begin investing, advises Steve Cronin, the founder of DeadSimpleSaving.com.
Think long-term: When you invest, you need to have a long-term mindset, so don’t worry about momentary ups and downs in the stock market.
Invest worldwide: Diversify your investments globally, ideally by way of a global stock index fund.
Is your money tied up: Avoid anything where you cannot get your money back in full within a month at any time without any penalty.
Skip past the promises: “If an investment product is offering more than 10 per cent return per year, it is either extremely risky or a scam,” Mr Cronin says.
Choose plans with low fees: Make sure that any funds you buy do not charge more than 1 per cent in fees, Mr Cronin says. “If you invest by yourself, you can easily stay below this figure.” Managed funds and commissionable investments often come with higher fees.
Be sceptical about recommendations: If someone suggests an investment to you, ask if they stand to gain, advises Mr Cronin. “If they are receiving commission, they are unlikely to recommend an investment that’s best for you.”
Get financially independent: Mr Cronin advises UAE residents to pursue financial independence. Start with a Google search and improve your knowledge via expat investing websites or Facebook groups such as SimplyFI.
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Sri Lanka World Cup squad
Dimuth Karunaratne (c), Lasith Malinga, Angelo Mathews, Thisara Perera, Kusal Perera, Dhananjaya de Silva, Kusal Mendis, Isuru Udana, Milinda Siriwardana, Avishka Fernando, Jeevan Mendis, Lahiru Thirimanne, Jeffrey Vandersay, Nuwan Pradeep, Suranga Lakmal.
Bareilly Ki Barfi
Directed by: Ashwiny Iyer Tiwari
Starring: Kriti Sanon, Ayushmann Khurrana, Rajkummar Rao
Three and a half stars
UAE currency: the story behind the money in your pockets
Paatal Lok season two
Directors: Avinash Arun, Prosit Roy
Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
Rating: 4.5/5
List of alleged parties
May 12, 2020: PM and his wife Carrie attend 'work meeting' with at least 17 staff
May 20, 2020: They attend 'bring your own booze party'
Nov 27, 2020: PM gives speech at leaving party for his staff
Dec 10, 2020: Staff party held by then-education secretary Gavin Williamson
Dec 13, 2020: PM and his wife throw a party
Dec 14, 2020: London mayoral candidate Shaun Bailey holds staff event at Conservative Party headquarters
Dec 15, 2020: PM takes part in a staff quiz
Dec 18, 2020: Downing Street Christmas party
Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
