UK consumers are reportedly slashing their spending due to the cost-of-living crisis
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Retailers across the UK in September recorded the slowest sales growth since the reopening of physical stores after Covid-related shutdowns, business advisory firm BDO said on Friday as quoted by Reuters.
According to BDO, total like-for-like sales in September increased by 2.8% from a year earlier, as the cost-of-living crisis forced British consumers to rein in spending. This follows an increase of 3.6% recorded in August, which marked the previous post-Covid low.
“The actual performance for retailers may be even worse than these results suggest. With rising inflation, data suggests that the actual volume of sales is down significantly while it is higher prices that is driving the growth,” Sophie Michael, BDO’s head of retail and wholesale said, commenting on the findings.
The consultancy added that sales growth during the last week of September slumped to 1.33%.
“Having spent significant sums refreshing their living spaces during COVID-19 lockdowns, many consumers are now likely tightening their belts and postponing bigger single purchases,” BDO said, commenting on the September results in the homewares sector, where total like-for-like sales fell 6.3%.
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British shoppers and households are currently struggling with record inflation, while consumer confidence sinks to a record low. The government’s controversial recent mini-budget sent mortgage rates soaring, sparking major concerns that house prices could collapse.
Some UK retailers, including Tesco, Next and Primark recently slashed their profit expectations. Meanwhile, UK workers wages are failing to keep pace with inflation, which reached 9.9% in August.
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