British consumer spending continues to drop | RetailDetail

British consumer spending continues to drop

British consumer spending continues to drop
Shutterstock

Consumer spending in the UK has dropped for the third straight month in July. It is the first time in four years that there was a three-month drop, with analysts pointing to the Brexit.

Higher prices and lower wage growth

In July, expenses dropped 0.8 % compared to the year before and it experienced similar drops in May and June. It hadn’t happened since February 2013, when the economy was still recovering from the financial crisis.

 

This time around, the brexit is weighing down the British consumer’s spending. “The figure provides further evidence that rising prices and stagnant wage growth are squeezing consumers' pockets”, said Kevin Jenkins, Visa's managing director for the United Kingdom and Ireland.

 

Only last week, the Bank of England lowered its economic growth forecast for 2017 and 2018, mainly because wages are not growing as much as expected. The slower wage growth is amplified through inflation caused by the Brexit and the weaker pound.

 

Strong hospitality industry

Clothing sales dropped 5.2 % in July, the second largest drop in a five-year time frame. It comes as no surprise, seeing how Brits mainly import their clothing. However, at the start of July, there was a slight surge, mainly thanks to the excellent weather, but unfortunately, the sales did not sustain.

 

The hospitality industry did not suffer as much as the rest of the economy, because many Brits decided to go on vacation locally, spending more money in their own establishments, thanks to the weaker pound. 

Questions or comments? Please feel free to contact the editors


Gerelateerde items

Not everyone is pleased with new European warranty guidelines

23/02/2018

The European Parliament approved a proposal to harmonize warranties all across Europe, but not everyone is satisfied with the content.

The world's first start-up supermarket, KaDeTe, opens in Berlin

22/02/2018

The world’s first startup supermarket, KaDeTe, will open its doors in Berlin next month. The physical marketplace will give young brands and companies an opportunity to engage consumers and buyers.

"Not a major surprise" if Unilever were to choose Rotterdam

22/02/2018

The Financial Times believes Rotterdam is in pole position to become the British-Dutch Unilever’s new main office, instead of London. The business paper claims the information comes from political insiders.

Record results for Henkel

22/02/2018

German Henkel experienced a strong 2017, with record numbers for both its profit and turnover. The company managed to surpass the 20 billion euro turnover milestone for the first time.

Go Sport divulges major international plans

22/02/2018

French sports retailer Go Sport, which has twelve stores in Belgium, has very ambitious expansion plans. Spain and Poland are its European targets, but it will also focus on Morocco and India.

American chains consolidate to fight Amazon

21/02/2018

American retailer Albertsons has acquired its competitor Rite Aid, after the latter had already sold a series of stores to Walgreens. The acquisitions are mainly a reaction to Amazon and other online players’ onslaught.

Back to top