Brits have slowed their spending habits over the last month amid the threat of soaring household energy bills, new figures show.
Data from the British Retail Consortium (BRC) showed that sales have slowed significantly over the past month as only price increases kept sales growth in positive territory despite falling retail volumes.
It came as separate figures from Barclaycard also showed card spending slowing to its lowest level in more than a year.
BRC-KPMG’s August retail sales monitor showed total sales for the month up 1%, compared with 3% year-on-year.
It comes after retail sales grew 2.3% in July.
Helen Dickinson, chief executive of the BRC, said the fall was due to a fall in demand for clothing towards the end of the summer.
“Retail sales growth slowed month-on-month in August as consumers reined in spending amid rising cost of living,” she said.
“While retail price inflation is over 10% lower than general inflation, it still represents a significant drop in sales volumes.
“For the first time in months, clothing sales have been sluggish after the summer events ended and parents have been holding back on back-to-school spending.
“White goods and housewares remained the hardest hit, but products like air fryers and knitwear received a boost as frugal consumers brace for rising energy bills.”
The figures showed that grocery sales rose 3.8% in the three months to August, while non-food sales, which include clothing and housewares, fell 2% in the most recent quarter.
Don Williams, Retail Partner at KPMG, said: “The heatwave saw strong growth in health items like sunscreen, while summer grill food and beverage sales rose 5% year-on-year and home accessories also saw growth for the first months.
“Online sales fell by over 6% in August, but the stated increase in online penetration remains.”
Elsewhere, Barclaycard said consumer card spending rose 4.7% in August, the smallest increase since March 2021.
The credit card giant said spending on essential items rose 7.2% year-on-year on rising inflation, the biggest rise since December last year.
Supermarket spending also posted its biggest increase in 18 months, up 4.7%, as grocery inflation jumped to a new 14-year high.
Fuel spending also continued to rise, rising 23.9% over the month, although this reflected a slowdown in recent growth on the back of a slowdown in petrol and diesel prices in recent weeks.
Jose Carvalho, Head of Consumer Products at Barclaycard, said: “Clearly the cost of living is causing Britons to cut back on some non-essential purchases to ensure they can afford the rising costs of their weekly grocery shopping and household bills.
“Despite these inflationary pressures, consumers were still keen to enjoy the summer weather by eating and drinking out and staying with friends and family.”
