Many consumers are setting about reducing their debts, but such action could leave others in a worse financial situation – particularly those employed…
Many consumers are setting about reducing their debts, but such action could leave others in a worse financial situation – particularly those employed in retail.
The latest British Retail Consortium (BRC) figures on retail sales contained in the BRC-KPMG Retail Sales Monitor for January 2012 showed a 0.3 per cent decline in like-for-like sales compared with the same month in 2011. Sales were up by 2.1 per cent on a total basis, compared with 4.2 per cent a year before.
And while 2011 began with a bounce-back after the severe cold of December 2010 suppressed activity, the figures were still the second worst for January in the history of the survey, which began in 1995.
Commenting on the situation, BRC director general Stephen Robertson said: "As 2012 gets underway, it's clear people don't feel any better about the immediate future than they did 12 months ago.
"Customers parked their worries in December and spent, encouraged by discounts. Now, in the new year, reality has bitten again as concerns about jobs, wages and household costs reassert themselves."
He concluded: "Despite consumer confidence improving in January, actual spending shows households concentrating on paying off debt, saving and battening down for another tough year."
So while paying off debt may mean lower repayments for consumers, it could also lead to more retailers struggling and potentially shedding jobs.
And for those who have debts and work in shops, this could mean they get into severe difficulty, faced with ongoing interest bills to pay but without the income to cope.
The actual extent to which consumers have managed to bring their debts down has been very limited, according to research published this week.
PricewaterhouseCoopers said the average UK household reduced its debt by £355 over the course of 2011, but this still left £7,900 owing.
And at this rate the typical amount will still be £7,500 in 2013 – leaving Britons among the most personally indebted in the world, the report noted.
By Joe White