Retail spending increased in July
Despite the fact that there is doom and gloom surrounding the UK economy and more recently we saw downbeat comments from a number of leading retailers, retail spending actually increased by 1.1% in July. While there is no doubt that the World Cup and warmer weather did have an impact upon consumer spending in July, if we look below the line the situation is maybe not as upbeat as it could be?
Even though food spending tends to do relatively well even during economic downturns, the official figures from the Office of National Statistics show that food stores saw a reduction in retail spending of around 1% during July. There is no doubt that non-food based shops, such as sport shops, benefited most from the resurgence in consumer spending in July but there are concerns as to whether this trend will continue throughout the rest of 2010.
However, one trend which is starting to materialise is that UK consumers are now more focused in their approach for "bargains" with a number of retailers at the cheaper end of the pricing range reporting better-than-expected figures. If this particular trend continues it is likely to put more pressure on the likes of Tesco, Asda and other leading supermarkets in the UK which could and should benefit UK consumers in the short to medium term. Pricing competition between the leading supermarkets is often a recipe for improved bargains for UK consumers!
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