Brits are continuing to fork out more on their weekly shop, with households spending 8.9 per cent more on groceries year on year, with the nation increasingly turning to takeaways and nights in front of the telly in efforts to cut down on spending costs.
During May, consumer card spending rose just 3.6 per cent on a year to year basis – less than half the latest CPIH inflation rate of 7.8 per cent and lower than April 4.3 per cent as the nation remains cautious about spending on non-essential goods.
While food inflation cooled slightly in May as lower energy and commodity costs finally showed signs of filtering down to consumers – the figures remain the second highest inflation rate in the food category on record.
Now, more than six in 10 people say they are looking for ways to reduce the cost of their weekly shop..
“Although the latest headline figures show that inflation has fallen due to lower energy prices, the prices of core services and goods remain stubbornly high and continue to constrain real household disposable income and spending,” Silvia Ardagna, head of European economics research at Barclays, said.
An unusually wet May also led shoppers to spend less on new summer wardrobes with clothing brands seeing their largest decline in sales in over two years – being down 5.1 per cent.
Data released by the British Retail Consortium also showed that during the month UK total retail sales increased by 3.9 per cent in May, against a decline of 1.1 per cent last year, with the figure below the three-month average growth of 4.7 per cent.
However as Britain celebrated the King’s coronation and a series of bank holidays during the month spending on pubs, bars and clubs rose 6.4 per cent. Entertainment grew 7.3 per cent.
“Consumers are still paying close attention to their everyday spending, and we are seeing growing concerns around “shrinkflation” in the weekly shop. Many are having to forgo discretionary purchases to offset rising food prices, with clothing and restaurants most impacted,” Esme Harwood, director at Barclays, said.
Opting for an affordable night in front of the television also seemed to prove popular during the month with spending on subscription services and takeaways seeing their highest increases so far this year – rising 10.2 per cent and 13.1 per cent respectively.
“Consumers enjoyed nights in to watch the series finale of ‘Succession’, as well as popular new shows such as ‘Love & Death,” Barclays said.