Retailers have been unable to benefit from the increase in UK high street activity this year after lockdowns, after soaring energy prices and the cost of living crisis forced households to curb spending.
Despite an increase in in-person shopping after Covid 19 restrictions were lifted, Barclaycard data released for the full 2022 showed that retail spending fell by 0.8% year-on-year.
Debit and credit card companies said the number of transactions increased this year, but the basket size dwindled as consumers tried to keep track of their budgets, the highest inflation in 40 years.
Across the retail sector, total card transactions increased by 5%, while total spend decreased by 0.8%.
A 33% increase in utility bills has resulted in consumers becoming more conscious of their spending choices.
Annual inflation in the UK, which was already just over 5% at the beginning of 2022, has risen further due to the impact on gas and electricity prices of Russia’s invasion of Ukraine in February. . In November he more than doubled to 10.7%, and in October he was just below 11.1%.
Overall consumer spending, including dining out, hotel stays, international travel and retail, will increase by 10.6% in 2022, compared to a 5.9% increase in 2021, while spending at restaurants will increase by 37%,57 % increase in spending at bars and clubs. Spending at travel agencies increased by 190% as pandemic rules that made vacationing abroad difficult were eased.
Barclaycard Director Esme Harwood said: Hospitality, leisure and travel were all boosted, and Britons made up for lost time by socializing with friends and flying on holidays.
“However, the pressure on the cost of living is clearly impacting the retail sector.
“With these inflationary pressures continuing, all categories are likely to face further headwinds in 2023. I am optimistic that we will continue to find ways to adapt and respond to challenges.”
Overall spending on food fell by 0.1% compared to 2021, but the latest data from the National Bureau of Statistics shows food price inflation is over 16%. According to Barclaycard, shoppers are paying more attention to prices, reducing one-off items and opting for unbranded or supermarket-his-brand hot items.
Commentator Harry Wallop said consumers have become increasingly conscious of the cost of the goods they buy. And Brits are likely to stay in a similar mindset: eager to save cash whenever possible, but happy to splash out on items and experiences that will give them a boost once in a while.”