The squeeze on disposable incomes is getting tighter, with a record number of shoppers now saying they no longer have any spare cash.
According to the latest consumer confidence survey from the British Retail Consortium and Nielsen, factors such as rising utility bills and increasing fuel prices mean that more than 30% of people feel they have no money left for anything but essentials.
As a result, consumers are taking money-saving measures, with 71% changing their shopping habits and 65% switching to cheaper grocery brands.
Britain’s second-quarter consumer confidence index rose five points on the previous quarter to 72 as more people felt better about their job prospects and state of their personal finances, but it is still down on the whole of last year. Nineteen per cent of people are optimistic about their job prospects, a rise from 16% on quarter one, but 73% remain pessimistic. Sixty per cent are gloomy about their personal finances, while 35% are confident.
Weakness in the economy and rising utility, fuel and food bills top consumers’ concerns for the next six months.
The BRC says that households that do have spare cash are choosing to pay off debts and build up savings rather than spend on the high street.