The UK Retail Market Is Seeing Its Worst Decline Since the Pandemic Shutdown

A UK retail association has reported that as price increases strain household finances, retail sales decline at a previously unseen rate since the height of the epidemic.

According to the British Retail Consortium, consumers buy fewer large electrical appliances like refrigerators and plate-washers and choose the less expensive ones of those products. Further reports from the BRC and accountants KPMG state that physical and online retail has decreased for three consecutive months. The UK is presently seeing its quickest price growth in 40 years.
In May, inflation in the UK reached 9.1 percent, with rising food, electricity, and gasoline prices placing a strain on families’ budgets. Citizens are reducing their expenditure, according to Paul Martin, KPMG’s retail head. This is a result of novel price increases on the High Street. He added that internet sales had dropped significantly, with overall sales down 9 percent. The most significant drops are in furnishings, household gadgets, and computer devices.

The UK Jubilee weekend temporarily increased the sale of food items. The wedding and summer vacation seasons helped fashion sales. Still, these factors alone could not make up for the significant decline in consumer expenditure, according to Helen Dickinson of the BRC.

Citizens Reduce Their Spending as Salaries Are Stretched

BRC and KPMG showed that overall sales declined between the 29th of May and the 2nd of July 2 by 1%, compared to a 10.4% growth in June. The Institute of Grocery Distribution (IGD) predicts that inflation of foodstuffs might rise to 15% this summer, increasing the cost of buyers’ necessary consumables.

Susan Barratt of IGD says that spending behaviours are changing, with almost 60% of consumers now devoted to saving money, an increase of 5% from March. She adds that walking to a grocery store is now becoming preferred due to record-high gas prices. Twenty-seven percent of customers say this influences their store choice, up from 24 percent in May.

Increasing inflation means the GBPUSD will likely see more downside movement as the dollar keeps strengthening.

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