Consumer spending slows as Brits continue to cut back on non-essentials to offset rising prices

This comes as data from the British Retail Consortium NielsenIQ Shop Price Index last week revealed that Shop prices are now 8.4 per cent higher than a year ago, up from an 8 per cent increase in January.

Silvia Ardagna, head of European economics research at Barclays, said: “The UK economy flirted with a recession in the second half of last year as real GDP declined in the third quarter and was virtually flat in the fourth quarter. Persistent elevated inflation continues to take a toll on spending, as indicated by today’s figures, which could prolong the headwinds.

“However, some survey indicators for consumer confidence, and the recent business activity in the manufacturing and services sectors both point to tentative signs of a rebound. The labour market remains tight, with wage growth too strong for the Bank of England to stop hiking.”

Barclays notes that last year’s rates were also impacted by the lifting of Omicron Plan B restrictions last year, which caused a spike in spending due to pent-up demand, bringing down this year’s figures.

A survey conducted by Barclays shows that almost seven in 10 Brits say they are looking for ways to reduce the cost of their weekly shop. Almost half of these shoppers are cutting down on luxuries or one-off treats for themselves, while 48 per cent are buying more budget or value ranges.

Of those trying to cut costs, a third are shopping at multiple supermarkets to source a range of deals, and three in 10 are shopping in larger supermarkets.

Food shortages are also influencing grocery shopping habits, with one in two Brits noticing that some shelves in supermarkets are considerably emptier than normal. Over a third found they are less able to buy the items they need because of these shortages.

Tomatoes (43 per cent), eggs (34 per cent), cucumbers (22 per cent), peppers (19 per cent) and lettuce (16 per cent) are the top items shoppers have seen shortages of recently.

Esme Harwood, director at Barclays, said: “The recent fruit and veg shortages are forcing Brits to consider alternatives for their weekly shop, as they continue to look for savvy ways to offset rising food price inflation. Popular trends this month include buying ‘dupes’ of popular products, shopping at discount stores, and limiting Easter spending.”

In an effort to save money, over a third of consumers are buying ‘dupes’, otherwise known as affordable versions of more expensive, popular products, including food and drink and clothing.

As households switched on or turned up their heating amidst the cold weather, spending on utilities grew 43.2 per cent, with two thirds of consumers noting that they are consciously trying to save energy at home.

In response to rising household bills, nearly six in 10 are cutting down on discretionary purchases, with spending on non-essential items seeing a markedly smaller year-on-year uplift than in January.

Spending on public transport saw a sizable uplift of 22.6 per cent, as commuters locked in fares ahead of the recent 5.9 per cent increase in train ticket prices, which came into effect on 5 March.