No more Netflix and chill: Consumers cancel subscriptions and miss out on meals out amid historic inflation
Consumers are tightening their purse strings by cancelling digital subscriptions and holding off on buying new sofas, as inflation sits at a 40-year high.
Shoppers’ hesitancy to splash the cash on unnecessary treats or big ticket purchases has contributed to a retail sales growth slowdown, according to a tranche of spending statistics published today.
May saw the lowest like-for-like sales growth in 15 months as Brits fret about paying inflated household bills and hold off on discretionary spending, BDO’s high street sales tracker found.
The homeware sector fell 14.per cent compared to the same period a year prior.
Sophie Michael, head of retail and wholesale at BDO, said the slowdown could be one of the “first signs” of consumers cutting back amid an “unprecedented cost of living crisis.”
“The question is when this slowdown spreads to the other discretionary sectors, as consumers continue to tighten their belts,” she added.
What’s more, Brits are hesitant to spend money on digital subscriptions like Netflix as well as thinking twice before heading to restaurants, Barclaycard data revealed today.
Digital content and subscriptions declined -5.7 per cent, versus May 2021.
Consumers also held back on spending on meals out, with restaurants and licensed venues seeing slight drops, 5.9 per cent and 1.2 per cent respectively, compared to April 2022.
Helen Dickinson, chief executive of the British Retail Consortium, said it was evident a “post-pandemic spending bubble has burst,” with a turbulent time ahead for both retailers and the average consumer.
However, it not all bad news for the high street. Data showed boosts in fashion and travel as Brits stock up their wardrobes and head abroad in the absence of Covid restrictions.
The travel sector outpaced inflation and saw triple-digit growth (189.7 per cent) compared to last year, according to Barclaycard data.
The industry was also buoyed in comparison to the month prior, with travel agents recording a 24 per cent boost and airlines up seven per cent.
In BDO’s data, fashion saw the largest growth, with a like-for-like sales boost of 28 per cent for the month.
What’s more, there were other reasons for retailers to be optimistic, according to José Carvalho, head of consumer products at Barclaycard.
“While consumer confidence continues to fall, we hope to see at least a short-term boost thanks to the Jubilee Weekend, and the recently announced £400 energy bill discount coming in October,” he said.