Shoppers shun high street as British economy struggles

SHOPPERS shunned the high street last month as total spend rose by just 1.1pc, with customers cutting back on luxuries such as jewellery and watches.

The subdued rate of growth in February was revealed in new figures from the British Retail Consortium at KPMG, as retail purchases failed to keep pace with price rises.

While inflation figures for the month are not yet available, they will probably be higher. This raises fears that the UK is not on track for a swift rebound from recession, as consumers hold off on spending.

The BRC blamed recent wet weather for slower sales, while KPMG’S Linda Ellett said that households are feeling the strain from higher borrowing costs.

She said: “As many households continue to adapt budgets to meet higher essential costs, including higher mortgage rates, consumer reluctance to get out there and start spending is likely to remain in the short term.”

This will pose a challenge for retailers, she added: “With big increases in labour costs and business rates just weeks away, adding to an already stressed cost agenda for retailers, many will be pinning their hopes on some good news in the Chancellor’s spring Budget this week to help kick start a spending revival on the high street.”

Figures from Barclays show consumers’ card spending rose 1.9pc on the year, which marks the smallest increase since September 2022. High street spending, excluding groceries, dropped 2.2pc, the bank said, while purchases on home services, such as takeaways and digital subscriptions, climbed 6.5pc.

Jack Meaning, UK economist at Barclays, said slowing inflation will offer some reprieve for consumers.

He said: “We have continued to see encouraging signs of slowing price growth so far in 2024, particularly in the retail sector.”

However, the RAC said petrol prices rose 4p per litre last month, with diesel up almost 5p.

‘Consumer reluctance to get out there and start spending is likely to remain in the short term’