UK consumer spending falls to record low

Image copyright

July’s hot weather failed to boost consumer spending in the UK which fell to a new low amid Brexit uncertainty and slow real wage growth.

Average retail sales over the year to July rose by 0.5% – a record low according to the British Retail Consortium and KPMG.

They said the “challenging retail environment” was taking its toll on both the High Street and online.

And grocery sales, which normally rise when the sun is out, were “lacklustre”.

KPMG’s UK head of retail, Paul Martin, said that while online shoppers had chosen to go online to update their wardrobes in the hot weather, online non-food sales grew by just 3.7% in July from 7.5% in the same month last year.

He added: “Another category which has historically benefitted from the good weather is grocery, but even here sales are lacklustre, which is a cause for concern.”


Helen Dickinson, the BRC’s chief executive said a “combination of slow real wage growth and Brexit uncertainty has left consumer spending languishing”.

Wage growth accelerated to 3.6% in the year to May, according to the Office for National Statistics. However, when adjusted for inflation, pay remains below the average recorded before the 2008 financial crisis.

Average pay in May this year was £468 a week when adjusted for inflation compared to the pre-recession peak of £473 a week in April 2008.

Ms Dickinson said: “The challenging retail environment is taking its toll on many High Street brands who must contend with rising import costs, a multitude of public policy costs and ever higher business rates.”

Total sales in July rose by 0.3% after two months of falls.

Like-for-like retail sales in the UK also reversed two months of declines to grow by 0.1% compared to July last year.

Ms Dickinson said: “While retailers will welcome the return to growth, it has nonetheless been a punishing few months for the industry.”