UK Shoppers Tighten Belts Ahead of Autumn Budget
British households significantly reduced their spending in October, creating the slowest sales growth for retailers since May. New data reveals that consumer caution is directly linked to anticipation of the forthcoming Labour Autumn Budget and its expected tax measures.
Key Figures Reveal Spending Slowdown
According to the latest figures from the British Retail Consortium (BRC) and advisory group KPMG, retail sales increased by just 1.6% in October. This marks a noticeable step down from the 2.3% growth recorded the previous month.
The most significant slowdown occurred in food sales, where growth decreased by 0.8 percentage points to 3.5%. Industry analysts attribute this dip to a combination of fading consumer confidence, easing inflation, and households beginning to save for Christmas expenses.
Industry Leaders Voice Concerns
Helen Dickinson, Chief Executive of the BRC, commented on the subdued retail environment. “Retailers are counting on Black Friday to deliver a vital boost, but looming budget decisions risk undermining fragile consumer confidence,” she stated.
Dickinson noted that many consumers are deliberately delaying non-essential purchases, waiting for both Black Friday discounts and cooler weather before buying seasonal items like toys, electronics, and winter clothing. In contrast, furniture and homeware sales saw better performance as families began preparing their homes for festive gatherings.
She also highlighted a critical issue within the food sector, explaining that the observed growth was “mostly driven by higher prices rather than higher volumes.”
Sarah Bradbury, CEO of the grocery trade body IGD, echoed these concerns. “Confidence has dipped, with shoppers prioritising saving money over quality for the first time this year,” she reported. “The news of potential tax rises will concern many shoppers, even as food price inflation eased somewhat.”
Bradbury pointed to a stalling job market and the narrowing gap between pay growth and price rises as key reasons why shoppers aren't feeling financial relief. She predicts that this extra caution will continue in the short term as households budget carefully to afford Christmas treats.
Supporting this outlook, a consumer confidence tracker poll of 2,000 people conducted last month found that confidence fell across all seven areas it measured—the first such comprehensive decline since August 2022.
