BRC Economic Summary - Q2 2022

The BRC Quarterly Economic Summary provides a brief overview of the latest data produced by the BRC, including the latest economic trends and what they mean for the world of retail. They provide a non-technical look at retail sales, footfall, shop prices and vacancy data.

All data provided is from Q1 2022. For July 2022 data, please see our Retail dashboard.

Overview from the Quarterly Economic Summary:

Inflation continued to spiral in the second quarter of 2022by an average of 9.2% (ONS CPI). The cost-of-living crunch has become more acute, with even the cost of basic food goods, as measured by the BRC-Nielsen Shop Price Index, rising by 4.5%. Meanwhile, households face rising costs of housing and bills of almost 20% during Q2 (ONS). The result has been a further drop in consumer confidence, which reached an all-time low in June 2022.

The second quarter of 2022 saw quarterly sales growth fall into negative territory for the first time since the start of the pandemic. However, with inflation approaching double digits, the decline in sales volumes is likely to be significantly down on last year. Q2 2022 also saw a reversal of the stronger food sales, which fell into negative growth, while food returned to growth in the month (by value).

Looking forward:

With little end in sight to the war in Ukraine, high global food prices still filtering through supply chains, and a significant rise in domestic energy prices expected in October, inflation will continue to rise. The Bank of England has raised its inflation forecast, expecting it to peak at over 13% later this year.

With falling real incomes, and rising energy prices eating further into discretionary income, consumer spending is likely to be weak in the next quarter. There is also a growing trend for ‘buying down’ with even more affluent families choosing basic retail lines –both food and non-food –over previously purchased luxury brands