 Spending forecasts for 2011 reveal a North-South divide: consumers in London and the South East will spend up to 2.5% more this year, in stark contrast to -2% fall predicted in the North East. A new report commissioned by elkoo, reveals that 2011
will see a squeeze on UK retail spending as household disposable incomes fall by -1.5% or £223 on average this year to £14,649, forcing households to tighten their belts. Although overall consumer retail spending is expected to increase by 1% year-on-year, this is due to rising inflation, and underlying retail sales volumes are forecast to contract in 2011.
 On average, it is estimated that consumers will spend £4,747 each this year, with total retail sales forecast to reach £296.1bn. However, according to the study, regional retail spending disparities are significant, with London and the South East experiencing up to 2.5% growth in consumer spending, while the North East is predicted to see a -2% fall, resulting in a significant North-South divide in consumer retail expenditure patterns - driven by local economic and social trends.
The research, which was commissioned by Kelkoo and carried out by retail analysts Verdict, examines and predicts levels of consumer retail spending across the UK’s 12 major regions in 2011 compared to 2010. These figures are supported by three additional key economic factors in each region: disposable income levels, unemployment rates, and vacancy levels in shop units.
The report shows that shoppers in the North East will spend the least in the UK and are expected to cut back more than consumers in any other part of the country. Retail spending in the region is predicted to fall by -2% on average or £73 per person to £3,698 in 2011 - 28% (£1,049) less than the UK average (£4,747).
Reduced spending will also be an issue for retailers in the North West this year, with consumers set to spend £4,003 or -1.3% less than in 2010, as a result of falling disposable income levels (-2.1%) and a higher volume of vacant shop units than in any other UK region (16.1%).
In stark contrast, London and the South East will see the biggest growth in annual consumer spending at 2.5% and 1.8% respectively, with Londoners spending 25% more than the national average or the equivalent of £5,946 per person on retail goods this year. In spite of London’s relatively high levels of unemployment (9.9%), the average disposable income in the capital is £18,867 per household, the highest in the UK and remains almost 30% above the national average (£14,699).
Sadly, in 2011, we will need to spend more to buy less. It is therefore more important than ever for all of us to maximise the savings that can be made by shopping online.
Image: Sterling
Source: Verdict, Kelkoo©
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