Food and drink spending boosts consumer spending

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Food and drink spending boosts consumer spending

Danni Hewson, a financial analyst for AJ Bell, said the big increase in food and drink spending in supermarkets may indicate that people are choosing their kitchen tables over pubs and restaurants because fuel, energy and food prices have gone up for months due to the Pandemic and the Ukraine war, while wages have not kept pace. The rate of inflation is expected to increase this year.

In April, sales volumes at non-food stores decreased, online sales rose by 3.7% and the proportion of retail sales online was much higher than pre-pandemic levels, said Heather Bovill of the ONS.

She warned that the boost might be short-lived, because people can only spend a pound once and when that pound is worth less than a year ago, people have to make choices. The impact of Brexit on the economy, or the Covid shutdown, means that consumer confidence is now weaker than in the darkest days of the global banking crisis.

Nicholas Farr, assistant economist at Capital Economics, said that April's rise in retail sales suggested that the higher cost of living had not caused consumer spending to collapse and that the economy may have a little more momentum than we thought.