Energy concerns will be the overriding influence on consumer spending and the retail sector this Christmas, according to UBS, which has compiled a list of key economic indicators for the holiday season.
Consumer spending is up 3.9% compared to twelve months ago according to Barclaycard, driven by utility and grocery bills but also entertainment
Barclaycard data found that 54% of consumers intend to cut back on discretionary spending, such as eating out and clothing, to save money for energy costs, with electric, gas and other fuels up roughly 89% year-on-year according to UBS.
Elsewhere, supermarket spending was up 6.5% as food inflation hit a record 16.2% in October.
Spending on entertainment, such as cinema tickets and live events, jumped 11% while takeaways and fast-food expenditure climbed 13% year on year, a positive for food delivery services Deliveroo and JustEat.
The World Cup has also been a boon for pubs so far, with spending up 4.1%.
The British Retail Consortium, meanwhile, said retail sales grew 4.2% in October, with an extended Black Friday and colder weather driving demand for coats, hot water bottles and energy-efficient electrical goods.
Black Friday also “attracted more attention in fashion and homewares, with home furnishing sales helped by households trading big nights out for budget nights in,” good news for the likes of Dunelm.
Asda’s Income Tracker noted that the price of a basket of essentials grew 13.5% in October while the average discretionary income slipped 14.9% year on year.
Again, the Asda Income Tracker said that spending was heavily impacted by rising costs across electric, gas and other fuels.
Although inflation is expected to decelerate, the Centre for Economics and Business Research still forecasts inflation to remain ahead of 6% till at the end of next year.