UK Shoppers Ramp Up The Penny Pinching To Beat Price Jump
British consumers are fast changing their spending habits to save money amid a jump in inflation sparked by a weaker pound.
More than half of households in a Nielsen survey published Thursday said they’re making cost-cutting efforts, the highest proportion in two years and the latest sign of how shoppers are responding to faster price increases. Data this week showed wage growth remains tepid and real incomes continue to fall.
The statistics office will provide its latest snapshot of consumer behavior when it publishes retail-sales data for July at 9:30 a.m. in London. Sales are forecast to rise 0.2 percent compared with June.
The efforts by households to lower their expenses is a sharp reversal of behavior in the months following the Brexit vote, when cost-cutting hit a record low and spending propelled 2016 economic growth. But pressure on consumers has increased this year and average real wages fell 0.5 percent year-on-year in the latest quarter.
According to Nielsen, 30 percent of households said they switched to cheaper grocery brands to save money, the most popular method of thrift ahead of saving on gas and electricity and spending less on new clothes. The survey bears out findings from the Bank of England last week, when it said that shoppers have been trading down to cheaper products.
Consumer confidence has also plummeted since the Brexit vote last June, according to Nielsen, which said the U.K. has slipped from the second most confident country in Europe to the ninth. Almost half of respondents to the survey thought the U.K. economy was in a recession, though it has actually grown for 18 straight quarters.