The ongoing conflict in the Middle East has left consumer confidence in the economy and their ability to spend ”in the doldrums”, according to the British Retail Consortium.
The BRC’s latest consumer confidence index shows growing shopper anxiety about rising fuel and grocery prices, which has led the retail lobbying group to call on the government to take “decisive action” to protect customers.
Shopper optimism about the economy remained unchanged at -53 in April, while consumer’s feelings about their own personal finances dipped 4 percentage points to -21 in the same period.
Because of rising prices, shoppers are expecting to spend more – with anticipated personal spending on retail rising to +5 in the period, up three percentage points from the previous month.
The findings of the latest consumer confidence survey came the same week that the ONS announced that food inflation hit 3.7% due to increases in fuel and input costs.
“The Middle East conflict continues to stoke consumer anxiety around inflation and the cost of living,” said BRC chief executive Helen Dickinson.
“Amid a volatile geopolitical situation, households are expecting to see their pay packets squeezed by rising petrol, domestic energy, and food prices. Expected retail spending rose, but this was driven entirely by grocery spend, with most consumers expecting to rein in spending in other areas.”
Uncertainty would grow within the economy the “longer volatility drags on”, Dickinson warned.
“Businesses are battered by higher energy costs while also grappling with the growing burden of domestic policy pressures. From new Packaging taxes to incoming employment and health regulations, the government has levers it can pull to limit the inflationary fallout.
“Taking early, decisive action would help shield consumers from a spike in the cost of living they simply can’t afford,” Dickinson added.
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