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The British Retail Consortium has warned of a January spending squeeze, as BRC-Opinium data between 10 and 13 December showed that people’s spending intentions dropped 6pts.
It comes as public confidence in the state of the economy “took a nosedive”, falling 8pts to -27, creating a widening gap between expectations of the economy and of people’s own finances which remained unchanged.
The BRC also found that consumers’ personal finance situation remained at -3 in December, the same as in November.
However, personal savings increased to -5 in December, up from -9 in the previous month.
Helen Dickinson, CEO of the British Retail Consortium, said: “If these expectations are realised, retailers could find themselves facing a New Year spending squeeze just as they unveil their January sales. The weak spending intentions could pave the way for a challenging year for retailers, who face being buffeted by low consumer demand and £7bn of new costs from the Budget set to hit the industry in 2025.
“With sales growth unable to keep pace, retailers will have no choice but to raise prices or cut costs – closing stores and freezing recruitment. To mitigate the impact this will have on growth, the government must ensure that its proposed business rates reform does not result in any shops paying higher rates than they already do.”
