LONDON, Sept 16 (Reuters) – British retail sales fell much more than expected in August, in another sign that the economy is sliding into recession as the cost of living crunch squeezes households’ disposable spending.
Retail sales volumes dropped by 1.6% in monthly terms in August, the Office for National Statistics said – the biggest fall since December 2021 and worse than all forecasts in a Reuters poll of economists that had pointed to a 0.5% fall.
The data are likely to add to worries about the strength of demand in Britain’s economy. UK fashion retailers Primark (ABF.L) and ASOS (ASOS.L) and online supermarket Ocado Retail (OCDO.L) have all warned about their profits this month. read more
The pound slid further towards $1.14 on the back of the data.
“With a difficult winter to come, it will come as a worry to retailers that shoppers have already reigned in their spending despite the hot summer,” said Lynda Petherick, retail lead at Accenture.
All of the main retail sectors – food stores, non-food stores, non-store retailing and fuel – fell over the month for the first time since July 2021, when COVID-19 restrictions on hospitality were lifted, the ONS said.
The period of mourning following the death of Queen Elizabeth poses another challenge to retailers, with widespread business closures due on Monday to mark the queen’s funeral.
“The sombre atmosphere in the UK this week and news of slow economic growth will be adding to the sense of concern among retailers as the weather gets colder,” Petherick said.
Although inflation dipped below 10% last month, households are still grappling with the biggest price increases since the early 1980s, caused mostly by surging energy prices in the aftermath of Russia’s invasion of Ukraine.
The ONS said people cut back on furniture purchases last month.
“Feedback from retailers suggests that consumers are cutting back on spending because of increased prices and affordability concerns,” it said.
Not surprised to see this, let’s be honest, normailty in retail spending disappeared some time ago. Covid saw irrational spending, Klana introduced unnecessary spending for many and now cost of living is giving people a reality check. Me included. Just bought a projector for shits and giggles. Do I need it? no, can I afford it? yes, will my next purchase be frivolous? I don’t think so. I’m certainly going to be focussing on health and wealth until the new year. Constant spending has to stop at some point.
Unfortunately this was to be expected. People are now prioritising the cost of necessities and not having any income left to afford little luxuries – be it clothes (which in some cases could be essential) or even little treats such as going out for lunch or dinner.
I think even with the price cap, a lot of households are still affected by the cost of living.
I really feel for people who ended up fixing their prices due to sheer fear and are now tied in I believe as there’s no exit (vaguely remember seeing some posts on this subreddit about it).
Truly who could ever have predicted that if you increase the number of people who cant afford to spend beyond housing; food and general bills that it would impact the rest of the economy.
It’s almost as if people have been pointing out that there are issues for years while our government stands by with their head in the sand refusing to so much as consider they might need to address the ever inflation busting rise in necessities.
It’s almost as if an economy based around people having money to spend beyond just surviving might suffer if you make the people only have enough to barely survive.
we’re all broke but don’t worry, once the gov lets the rich claw in even more cash it’ll start to trickle down to us. any moment now…
Wow it’s almost as if we’ve got no money to spend /s
Who knew that when you can barely afford to keep a roof above your head or food in your stomach, that you wouldn’t be out splashing the cash about? Madness
Retail sales are back to the level they were in 2019, and still higher than 2017 or 2018. Retail sales rocketed after the Covid lockdowns ended but are now returning to normality. But I guess that doesn’t make such a good story. Reuters is turning into the Daily Mail. Their own graph contradicts their own headline.
Lol not surprised, probably only a drop in the ocean but this Christmas our huge family which spends next to £2000-2500 on presents in total are now doing a secret Santa at £25 a head (2people each to buy for)
Times that by the billions of people who can’t afford it now anyway
Both sides of govt will eagerly destroy Britain’s economy if needed to serve His Master’s Voice in Washington.
Come on peasants, get spending! If you have any kind of pensions or savings then stop contributing and start buying junk that belongs in landfills. Get down to Home Bargains and B&M and buy some shite!
The Ponzi economy needs YOU! **You’re consumers so get consuming.**
Wow really? It’s almost like fuel costs are out of control and inflation is running wild?
O and Putting interest rates up… no idea why people would start to save money
I bought a £4 tambourine for my daughter from a charity shop today and *that* felt like splurging. I’m certainly not buying new and I don’t remember the last time I spent money on myself, even second-hand.
The solution is simple but steps will never be taken to address the issue, not if affects the shareholders and the CEO’s bonuses. If you want a system based on people buying things to keep the economy going, people need to have the extra money to do that. It is not hard to understand why people are not spending: they either cannot or are choosing to save for leaner times. Hoarding all the wealth at the top means nothing if that money just sits there and does nothing, everything will just stop as those who really make the economy work are priced out of living.
There going raise interest rates again in few weeks so people will have even less money to spend. Global recession be here next year
15 comments
LONDON, Sept 16 (Reuters) – British retail sales fell much more than expected in August, in another sign that the economy is sliding into recession as the cost of living crunch squeezes households’ disposable spending.
Retail sales volumes dropped by 1.6% in monthly terms in August, the Office for National Statistics said – the biggest fall since December 2021 and worse than all forecasts in a Reuters poll of economists that had pointed to a 0.5% fall.
The data are likely to add to worries about the strength of demand in Britain’s economy. UK fashion retailers Primark (ABF.L) and ASOS (ASOS.L) and online supermarket Ocado Retail (OCDO.L) have all warned about their profits this month. read more
The pound slid further towards $1.14 on the back of the data.
“With a difficult winter to come, it will come as a worry to retailers that shoppers have already reigned in their spending despite the hot summer,” said Lynda Petherick, retail lead at Accenture.
All of the main retail sectors – food stores, non-food stores, non-store retailing and fuel – fell over the month for the first time since July 2021, when COVID-19 restrictions on hospitality were lifted, the ONS said.
The period of mourning following the death of Queen Elizabeth poses another challenge to retailers, with widespread business closures due on Monday to mark the queen’s funeral.
“The sombre atmosphere in the UK this week and news of slow economic growth will be adding to the sense of concern among retailers as the weather gets colder,” Petherick said.
Although inflation dipped below 10% last month, households are still grappling with the biggest price increases since the early 1980s, caused mostly by surging energy prices in the aftermath of Russia’s invasion of Ukraine.
The ONS said people cut back on furniture purchases last month.
“Feedback from retailers suggests that consumers are cutting back on spending because of increased prices and affordability concerns,” it said.
Not surprised to see this, let’s be honest, normailty in retail spending disappeared some time ago. Covid saw irrational spending, Klana introduced unnecessary spending for many and now cost of living is giving people a reality check. Me included. Just bought a projector for shits and giggles. Do I need it? no, can I afford it? yes, will my next purchase be frivolous? I don’t think so. I’m certainly going to be focussing on health and wealth until the new year. Constant spending has to stop at some point.
Unfortunately this was to be expected. People are now prioritising the cost of necessities and not having any income left to afford little luxuries – be it clothes (which in some cases could be essential) or even little treats such as going out for lunch or dinner.
I think even with the price cap, a lot of households are still affected by the cost of living.
I really feel for people who ended up fixing their prices due to sheer fear and are now tied in I believe as there’s no exit (vaguely remember seeing some posts on this subreddit about it).
Truly who could ever have predicted that if you increase the number of people who cant afford to spend beyond housing; food and general bills that it would impact the rest of the economy.
It’s almost as if people have been pointing out that there are issues for years while our government stands by with their head in the sand refusing to so much as consider they might need to address the ever inflation busting rise in necessities.
It’s almost as if an economy based around people having money to spend beyond just surviving might suffer if you make the people only have enough to barely survive.
we’re all broke but don’t worry, once the gov lets the rich claw in even more cash it’ll start to trickle down to us. any moment now…
Wow it’s almost as if we’ve got no money to spend /s
Who knew that when you can barely afford to keep a roof above your head or food in your stomach, that you wouldn’t be out splashing the cash about? Madness
Retail sales are back to the level they were in 2019, and still higher than 2017 or 2018. Retail sales rocketed after the Covid lockdowns ended but are now returning to normality. But I guess that doesn’t make such a good story. Reuters is turning into the Daily Mail. Their own graph contradicts their own headline.
Lol not surprised, probably only a drop in the ocean but this Christmas our huge family which spends next to £2000-2500 on presents in total are now doing a secret Santa at £25 a head (2people each to buy for)
Times that by the billions of people who can’t afford it now anyway
Both sides of govt will eagerly destroy Britain’s economy if needed to serve His Master’s Voice in Washington.
Come on peasants, get spending! If you have any kind of pensions or savings then stop contributing and start buying junk that belongs in landfills. Get down to Home Bargains and B&M and buy some shite!
The Ponzi economy needs YOU! **You’re consumers so get consuming.**
Wow really? It’s almost like fuel costs are out of control and inflation is running wild?
O and Putting interest rates up… no idea why people would start to save money
I bought a £4 tambourine for my daughter from a charity shop today and *that* felt like splurging. I’m certainly not buying new and I don’t remember the last time I spent money on myself, even second-hand.
The solution is simple but steps will never be taken to address the issue, not if affects the shareholders and the CEO’s bonuses. If you want a system based on people buying things to keep the economy going, people need to have the extra money to do that. It is not hard to understand why people are not spending: they either cannot or are choosing to save for leaner times. Hoarding all the wealth at the top means nothing if that money just sits there and does nothing, everything will just stop as those who really make the economy work are priced out of living.
There going raise interest rates again in few weeks so people will have even less money to spend. Global recession be here next year