Research has shown that spending by consumers has increased year on year in July this year. Consumer spending is thought to have increased by 3.5% although despite this increase, shoppers have reportedly been feeling the effects of higher inflation as well as a subdued wage growth. The lack of wage growth and increase in inflation has left consumers less confident in the economy.
Despite the squeeze, there has been another piece of positive news, it has been found that they continued drop in the price in petrol has offered some relief for consumers. At the start of the year, it was recorded by Barclaycard that the price of petrol was at an average of 120p per litre. Last month this figure had fallen to 113p in July. Because of the drop in petrol prices, the amount of money spent on the forecourt has increased by just 2.5%in July. This statistic is the lowest to be recorded since August last year.
In July, consumers have been seen to budget and carefully focus on their priorities. As part of this, the so-called experience economies, or spending on activities with friends and family and entertainment has seen a healthy increase of 12.5%. This shows that more consumers are choosing to spend their money in restaurants or pubs, perhaps as they enjoyed the sunny early summer weather. With the tighter budgets, consumers are spending more carefully when it comes to their leisure time, choosing a family trip to the cinema, or a meal in a restaurant.
Due to the rising prices, 43% of consumers have said that they have had to make alterations to their everyday spending. 54% of these consumers are choosing to shop at discount stores more often. 28% of consumers asked said that they were making better use of coupons and discount codes in order to save money.