Official data and surveys have shown an improving outlook for UK consumer spending, which generates about two-thirds of gross domestic product, but retailers remain wary as inflation continues to outstrip wage rises.
“In 12 months’ time I think we’ll be sitting here saying inflation’s running at about three per cent and average wages have gone up about one per cent. So net on average a couple of per cent out of peoples’ incomes,” said Justin King, chief executive of Sainsbury’s, the UK’s third largest supermarket.
“The reality is whatever happens, I think, in the economic backdrop, we’re not going to see a sea change in the amount of money that consumers have to spend,” he told a grocery industry conference.
King said it was an individual’s personal circumstances that determined how they felt about the future.
“If they change their view about the future they might start making purchases that require a long term positive view,” he said.