BRC Data Shows High Inflation Is Weighing On Consumer Confidence

According to BRC-Opinium data, consumer expectations over the next three months of: 

• The state of the economy worsened to -36 in September, down from -32 in August.
  
  
• Their personal financial situation slightly worsened to -7 in September, down from -6 in August.
  
  
• Their personal spending on retail rose slightly to +5 in September, up from +4 in August.
  
  
• Their personal spending overall fell slightly to +14 in September, down from +16 in August.
  
  
• Their personal saving fell to 0 in August, down from +2 in September. 

Helen Dickinson, Chief Executive of the British Retail Consortium, said:
“Confidence among Millennials (28-43) fell dramatically this month, as their expectations for both the economy and their own finances fell by double digits. The same generation also cut spending expectations for the months ahead, though this was largely offset by improvements for Gen Z, who remain the most optimistic. Worries about the Budget, combined with the increase in the cost of living, have eroded confidence, with little sign that inflation will come down soon.

“Inflation is now one of the biggest concerns among the public, with food inflation expected to rise to 6% by the end of the year. All eyes are now firmly locked on the 26 November, and what the Chancellor will announce. The Government can help mitigate inflation, improve the cost of living, and raise consumer confidence, by ensuring the upcoming business rates reforms offer a meaningful reduction to retail business rates, while ensuring no shop pays more as a result.”

Responding to the latest CPI inflation figures, which show headline inflation remaining unchanged at 3.8% and food inflation rising to 5.1%, Dr Kris Hamer, Director of Insight at the British Retail Consortium, said:

Food inflation climbed above 5% in August for the first time in 18 months as rising employment costs and poor harvests drove up retailers’ costs. With food inflation now outpacing wages, many families will be struggling with the rising cost of living. Despite the increase, headline inflation held steady, as declines in categories such as transport and clothing and footwear—driven in part by retailers discounting the last of their summer collections—offset upward pressures. There was some good news in food as key staples such as cereals and pasta fell in price on the month.

Households across the country are noticing the increasing cost of their weekly shop. Retailers are doing everything they can to deliver great value for their customers, but are unable to absorb the £7 billion in costs they have been landed with this year thanks to rising costs of National Insurance, higher NLW, and a new packaging tax. The Chancellor can help turn the tide at the Budget by delivering a meaningful business rates reduction, with no shop paying more as a result. If the Government instead chooses to burden the industry with more costs, then it will be households who feel the pinch as they go about their weekly shop.

Source : BRC

Image : sergeyryzhov / iStock / 517010420

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