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Britons keep a tight grip on their money

Britons keep a tight grip on their money

Category: Money

Updated: 07/06/2011
First Published: 07/06/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Consumers are becoming increasingly reluctant to spend money, with sales on the UK's high streets suffering as a result.

The British Retail Consortium (BRC) said that after taking out the effects of closures and new stores, sales fell by 2.1% in May compared with the same month in 2010.

There have been rises in the previous two months, with spending boosted by a combination of the Easter period, banks holidays and sunny weather.

The BRC said that today's figures are a more realistic reflection of how tough conditions on the high street really are.

Food sales slowed markedly after April's strong growth and non-food sales were also much weaker.

As the weather cooled, consumers' underlying uncertainty about jobs and incomes resurfaced, hitting clothing, footwear and homewares, with big ticket purchases put on the back-burner as well.

"The first half of May was better than the second, when the weather turned unseasonably wet and cold in many parts of the country, but customers' fundamental reluctance to spend is now clear to see," said Stephen Robertson, director general of the BRC.

"Households' disposable incomes continue to be squeezed by uncomfortably high inflation and low wage growth, while uncertainty over the effects of Government cuts is hitting consumers' sentiment about future finances.

"The VAT rise since last year is flattering the sales figures for most non-food goods, while renewed weakness in the housing market made life particularly difficult for retailers selling furniture and household goods."

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