UK shoppers, hit by fuel crisis, turn more cautious on spending

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imageEconomic Indicators15 minutes ago (Oct 12, 2021 07:46)

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© Reuters. FILE PHOTO: Shoppers cross the road in Oxford Street, in London, Britain August 14, 2016. REUTERS/Peter Nicholls/File Photo

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By William Schomberg

LONDON (Reuters) – British shoppers increased their spending in September at the slowest pace since January, when the country was stuck in a coronavirus lockdown, as they worried about a shortage of fuel, according to a survey published on Tuesday.

The British Retail Consortium said retail spending lost more momentum last month, rising by just 0.6% compared with September 2020, much weaker than August’s 3.0% increase.

“There are signs that consumer confidence is being hit as the fuel shortages, combined with wetter weather, had an impact in the second half of the month,” BRC Chief Executive Helen Dickinson said. “This had a bigger effect on large purchases such as furniture and homeware.”

Much of the country saw panic-buying of fuel last month as a shortage of tanker drivers led to disruption of supplies. The government has blamed this on problems facing the global economy as it reopens after lockdown, but critics say it also reflects Britain’s tougher post-Brexit immigration rules.

A separate survey of broader household spending by card payments firm Barclaycard showed consumers increased their spending on fuel by 11.1% compared with September 2019, the biggest such increase in more than two years.

Overall consumer card spending grew by 13.3% compared to the same period in 2019, Barclaycard said.

Its surveys currently do not compare sales with 2020 because of distortions caused by the pandemic lockdowns.

Almost half of Barclaycard’s respondents reported seeing empty spaces on the shelves, reflecting the shortage of truckers, and 18% said they found it harder than usual to find fresh fruit and vegetables.

Spending growth on non-essential items slowed, which might be a sign some consumers were starting to cut back on discretionary purchases as inflation rose, Barclaycard said.

Nine out of 10 respondents were concerned about the impact of inflation on their household finances, something the Bank of England will note as it considers when to raise interest rates for the first time since the pandemic hit. The proportion who felt optimistic about the economy fell to 31% from 37% in August.

But there were signs of a return to something resembling normality for some sectors hit hardest by lockdowns.

Spending at pubs and bars rose as newly reunited colleagues went out and takings at cinemas, theatres and concert halls also rose. Struggling travel agents and airlines saw the scale of their sales falls narrow.

UK shoppers, hit by fuel crisis, turn more cautious on spending

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