Almost 60% of British shoppers said they will cut back on non-food spending in the so-called “golden quarter” – the last three months of the year when most retailers make the majority of their profits, according to media reports based on research by Retail Economics with retail technology firm Metapack.
British shoppers are likely to spend £4.4 billion less on non-essentials during this period, down 22% on the same quarter in 2021, the report said.
This is a significantly larger drop than other European countries, with an expected drop in spending of 14% in Spain, 12.3% in Italy, 11.5% in France and 9.4% in Germany.
Consumer surveys were undertaken by Retail Economics – an independent economics research consultancy focused on the UK consumer and retail industry – in August 2022 and include answers from a sample of more than 8,000 nationally representative consumers across the UK, US, Canada, Australia, Germany, France, Italy and Spain.
The report comes amid uncertain times for UK retail, with spiraling inflation and energy costs.
Speaking to the media, Richard Lim, the chief executive of Retail Economics, said that inflation is set to peak at exactly the wrong time for retailers and shoppers’ budgets are already under intense pressure with inflation reaching decade-highs across international markets.
“Consumers are concerned, budgets are under pressure, and households are intending to cut back this year as they struggle to make ends meet,” he added.
“Against this weakening consumer backdrop, retailers are also facing a pincer movement of rising input and operating costs which is testing business models to breaking point. With profit margins under intense pressure, some retailers are planning to pass on costs through delivery and return options, precisely the areas that encourage consumers to seek out alternatives,” he added.