The cost of living in the UK continues to rise as essential spending for shoppers increased by 0.6% in February.
As reported by The Mirror, figures from the British Retail Consortium (BRC) and KPMG showed that in February, UK like-for-like retail sales grew by 0.6% year-on-year, compared with a 0.4% decrease in February 2017.
On a total basis, sales rose 1.6% in February, against a growth of 0.4% in February 2017.
Essentially, that means inflation is eating into people’s budgets and forcing them to spend a greater share of their income on essentials and leaving them with less to buy discretionary and non-food items.
Continued weak growth in household earnings is also keeping overall sales low.
Helen Dickinson, chief executive of the BRC, said: “There’s little sign that consumer confidence, rather than financial reality, has much to do with the current weakness in spending.
“Furniture, often considered the bellwether of consumer confidence, actually saw sales improve in February as shoppers took advantage of credit facilities offered by retailers. The fact is that consumers want to spend, they just don’t have the resources to do so.”
In contrast, retailers will be happy with the increase given that consumer demand continues to fall and the cold winter weather in February will have prevented many people from physically visiting stores.
Paul Martin, head of retail at KPMG, said: “Total growth of 1.6% in February is quite an achievement in such testing times.
“Softening consumer demand, rising costs for retailers and of course the ongoing structural changes within the industry are creating the perfect storm which is uprooting the weakest players.
“On the high street, it was grocery sales that continued to pull it out of the bag. Meanwhile, Shrove Tuesday may have resulted in an uptick in cooking accessory sales, but performance in non-food in general was once again disappointing.”
Meanwhile, figures from Barclaycard show consumer spending grew 3.8% year-on-year in February, while travel spending rose by 7.4% year-on-year – the highest level seen since December 2016, driven by a strong increase in spending on airlines.