UK retailers hit by sharp drop in spending as inflation soars

theguardian.com:

Britain’s retailers are suffering the sharpest drop in spending since the depths of the coronavirus pandemic as hard-pressed consumers tighten their belts as a result of soaring inflation.

The monthly health check from the British Retail Consortium (BRC) reported a third successive drop in activity as the cost of living crisis continued to bite.

With the annual inflation rate hitting 9.1% in May, the BRC said even the boost to demand caused by the Queen’s platinum jubilee celebrations failed to prevent retail sales in June being 1% lower than a year earlier.

The lobby group said retailers were struggling to avoid passing on higher costs to their customers and urged the government to provide help through lower business rates.

A separate survey from Barclaycard showed a similar picture to the BRC, with a year-on-year drop of more than 5% in household goods spending providing evidence of consumers cutting discretionary spending. The payments company said 91% of people were concerned about the negative impact of rising household bills on their personal finances – up from 88% in May.

With growth slowing, interest rates rising and the Bank of England forecasting an inflation peak above 11%, Barclaycard said consumers were also feeling less optimistic about their ability to live within their means and their ability to spend on nonessential items.

Helen Dickinson, the BRC chief executive, said: “Sales volumes are falling to a rate not seen since the depths of the pandemic, as inflation continues to bite, and households cut back 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.

“While the jubilee weekend gave food sales a