UK High Streets dealing with £3billion Christmas blow after Rachel Reeves’ brutal funds
The impact of Rachel Reeves’ recent budget is set to cost British high streets around £3billion in lost Christmas spending as people cut back on their festive funds
The Budget is set to cost high streets £3billion in lost Christmas spending as shoppers cut back following a muted Black Friday and Cyber Monday weekend.
One in two Brits plan to reduce festive expenditure, and almost half will visit hospitality venues less, polls show.
The impact of Rachel Reeves’ tax raids and economic woes mean spending up to December 25 will be several per cent lower than in an upbeat financial environment, said authors of the UK’s most comprehensive Christmas retail study.
Even just three per cent lower spending over the six-week run-up to the big day will see embattled retailers miss out on £2.7billion, said analysts GlobalData Retail, which produced a spending study for VoucherCodes.co.uk, supported by a survey of 2,000 shoppers.
GlobalData Retail analyst Matt Piner said: “Overall Christmas period spending will undoubtedly be several percentage points lower than if the economy and consumer confidence were buoyant.
“Consumer sentiment was rock-bottom ahead of the Budget, with spending held back due to concerns about tax raids. Now the Budget’s negative economic points are weighing on consumers.”
A Slack Friday for stores saw shopper numbers plummet up to 13 per cent compared to last year. Footfall on Friday was down 3.3 per cent averaged over the UK, but down 10 per cent in the North and 13 per cent in the West Midlands.
Analysts MRI Software said: “The cost-of-living squeeze is weighing on retail activity.”
Indoor malls and retail parks were busy yesterday (Sat) but rain kept high streets quieter.
Spending between Friday and Cyber Monday tomorrow, (Mon) when bargain-hunters buy online after comparing in-store prices over the weekend, is projected to total £9.52bn, up 4.2 per cent on last year, the VoucherCodes.co.uk report said.
£91.1bn is due to be spent in the six weeks to December 25, up 3.2 per cent on a year ago.
But Brits will actually buy less this Christmas as rampant 3.6 per cent inflation, almost double the Government’s two per cent target, means a lower volume of goods is being being bought, with increased spending only due to higher price tags.
Mr Piner said: “Inflation is higher than the projected 3.2 per cent increase in Christmas spending from last year, meaning a lower volume of products will be bought in fact.
“When the economy is doing well, you would expect five to 10 per cent spending growth at Christmas year-on-year. But even with high inflation, we won’t be near that. Consumers feel cautious.”
53 per cent of Brits will cut Christmas spending, a survey by digital advertising firm GumGum showed, while 43 per cent will visit pubs and restaurants less, VoucherCodes.co.uk found.
Shops are braced for a tough festive season. Helen Dickinson, chief executive of the British Retail Consortium, said: “Pressures are bearing down on the industry. 100,000 retail jobs have been lost over the last year. Further cost rises will be challenging.”
