Basket & Barometer May 2026

SPEAKER_00: Welcome to Basket and Barometer Podcast. And as ever, I'm joined by my co-host, Dan Well. Hi Dye. SPEAKER_01: Hi Simon, how are you?

SPEAKER_00: Yeah, very, very good. Time of recording, we're just at the end of that mini heat wave. So there's ever in there's ever something to talk about in terms of the weather. Too hot at the moment, but um I'm sure it's been too cold as well and everything like that.

SPEAKER_01: Well it's always too something, isn't it? Too wet, too dry, too southern, too cloudy. SPEAKER_00: British talking point, the weather. Um moving on to hopefully more positive things.

We'll see. We'll see. We're in April now, aren't we? So it feels an eternity ago, but that was when Easter was.

It was kind of spanned right this the end of the month and then the start of April, didn't it? SPEAKER_01: I think it was. It was the first weekend in April, which was interesting because we didn't realise it at the time where we were commenting on March's results because they weren't great. But actually, what it did do was bring some spending forward into March, and so that's impacted April.

So, you know, all the pre-Easter stuff where people went on holding just before Easter and they were gearing up for Easter, a lot of that spending happened actually in March rather than in April itself. But most of April was post-Easter. So shall I dive straight in and talk about some numbers? SPEAKER_00: Yep, let's do it.

SPEAKER_01: So, starting with footfall into stores, courtesy are sensitive, not a great result at all. Overall, in terms of all types of channels, so that's high street shopping centres, retail parks, footfall was down by nearly 11% year on year, 10.7% drop. But I think we do have to be careful.

I'm always cautioning people about year-on-year chain numbers because, of course, if you've got a strong comparable for the year before, you know, it went up the year before, it's very hard to match that in this current year. And that's exactly what happened with the football data and also the BRC real sales data. So last April, and Easter was the second week of the month last year, football was up by 7.2%, and this year it's down by 10.

7%. So it does lurch from peak to trough, peak to trough a bit. So some of that decline will be because of a strong comparable. Likewise, sales, as measured by the BRC, so that's sales across their membership, dropped by 3% year on year.

But again, April last year they were up seven percent, so strong comparable again. But that's the first negative result that the BRC have published since November 2024. So, you know, it it it you know, it it's it's it's showing that was you know, you know, spending is is soft. March actually spending was up 3.

6% year on year. So it's clear that some spending was was you know brought forward into March. Interestingly, spending in non-food spending in store, so that's taking out the online element of it, was four percent down. And this then segues into the Beauclair results, which is sales in the high streets and town centres, which is 4.

9% down. So it's a very, very similar result there. And actually, Beauclair reported last April an almost flat results, so it's 0.1% mark.

So, you know, sales were down, people were cautious, but we know this. And Beauclair has identified that five sectors account for the vast majority of spending in towns and cities. That's fashion, food and drink, general retail, grocery, and health and beauty, and all of those five sector spending was down in all of those. The greatest drops actually were in general retail and fashion.

So, you know, it it tends to be discretionary stuff that people aren't buying particularly. And why would they? Food and drink was down by 5.1, so people were clearly pulling back a little bit on spending out in bells and restaurants, as they would do, because inflation in food and drink or in catering hours is still high, still over 4%.

So that sort of takes us straight into inflation, really. SPEAKER_00: So a pretty grim picture again, but as you say, you know, like like for likes are always tricky if your comparison was good, bad, or indifferent. Yeah, let's touch on inflation and then we'll kind of broaden the picture slightly and just have a look at unemployment. Obviously, in the the background overarching context of all this, is this clearly still a war on, which is having a massive impact on price of fuel, and then all the other things that are related off that.

So inflation, where where did we stand? SPEAKER_01: 2.8% in April, down from 3.3, which I mean, some of that will be due to the the price cap on fuel, well uh you know electricity and gas, which is sitting just at 1.

4%. Actually, fashion inflation, which is actually very low at the moment, and that's probably due to a lot of fashion retailers discounting, just point seven percent. In contrast, transport, which includes fuel, of course, and communication, both four and a half percent, and restaurants and hotels, hospitality four point four percent, uh, restaurants and cafes four point five percent. So you can see that you know the price of going out to eat and drink and you know, have some leisure in town centres and elsewhere is is it's getting more expensive, isn't it?

And it's incre the prices are increasing much more than you know, fashion, really. So that's putting a dampler on that type of spending. SPEAKER_00: Is there is there a point when it breaks though? So this is my naivety coming through, but I'll ask the question anyway, because others are probably thinking it.

Is is there a point? So in inflation things keep going up clearly. Is there a point when it just gets too expensive? When when or how does that play through?

Is that because is that playing through when you're seeing the lights of original factory shop, Claire's, some of the other high streets going either not being relevant or going out of business now, or does there come a point when it breaks? SPEAKER_01: I think it it it there is. I mean, there are dynamics within each market that are so different. So um ultimately there isn't a cap on the amount that any operator can charge customers because they simply won't come in the shop.

But at the same time, you know, they if businesses go out of if some businesses fail and there are fewer suppliers on the high street for us to buy goods, then those who are left are in a better position to charge more. Simple economics, really. Yeah, and less, you know. SPEAKER_00: So it's the whole supply and demand economics, but it it feels like there'll come a point when a cup of coffee's 20 quid.

Yes. And and that's absolutely and is that just the way it will be, or is there a point when people say we we don't drink that anymore? I don't I don't know. I'm just trying it if you cast your mind forward ten years, things historically, when you look back, felt cheap, and we just seem to be accelerating that almost.

SPEAKER_01: They did, and I think that I think the operators will try and absorb as much as they can because clearly if they keep putting their prices up and they're not joined by their competitors, they will look out of kilter. So they will try and keep their prices as you know as careful as they can, but at the same time, you know, particularly in in hospitality, it requires volume as well. And if you're not getting the volume and it's perishable product, you know, ultimately it's it's a very elastic demand.

It needs, you know, it needs to respond. So I if honestly, I don't know, and I don't think anyone does, but I think there is a bit about them what the market will bear. And I think all the operators will keep a very close eye on the impact of any price rise on their customer numbers. Because if they start to dip, they'll hold back because they would rather keep customers coming through the door.

Because they've got all the all their fixed costs, they've got to cover, obviously. So it's it's it's very it's a really interesting one because you know I suppose if you look at you I suppose your question is will it will it top out? Yeah. Well, over the long term, I suppose no, because if you look at the last 50 years, it hasn't, it's just continued to go up.

SPEAKER_00: I know, and that that I suppose that's my overriding point of will will we ever be in a place where something gets cheaper? Don't know. SPEAKER_01: I don't know. I think to a some degree fashion has gotten cheaper because of the increased supply in the marketplace.

You know, we have fast fashion and that's brought the price down. And when I was young, you we didn't have fast fashion, so fashion was inevitably more expensive. But we could be just in a point where that fast fashion will start to escalate in terms of cost as well. SPEAKER_00: Yeah, interesting.

And and two other things that are kind of linked, so I suppose wage inflation and and unemployment. SPEAKER_01: Yeah. Yeah, so unemployment's now sitting at five percent, which is not a great number. And you know, we've no we know that a lot of um yeah, businesses are rationalizing their workforce and looking at slimlining their operations and becoming more efficient using AI if they can.

So that is impacting unemployment, particularly amongst younger people, and this is we know we've talked about this in previous months, you know, unemployment's five percent, but unemployment amongst the youngest age group is 14%. And so it's very expensive to employ younger people, and that isn't really changing from month to month at all. It's staying quite stable, it might shift 0.1% and then come back up again.

So it's moving around a lot. Last, you know, December to January, February it was five percent, it's now January to March, it's 5.1, but it was at 5.2, you know, and and earlier back in 2025 it was 5.

4. So it's sitting there or thereabouts, but I'm not seeing any great decrease in unemployment. You know, there isn't this lovely slow drop-off as each month progresses because operational costs are so high, and we're at that point where people it is expensive to employ young people. SPEAKER_00: Yeah, I'd uh I kind of use LinkedIn as my barometer of companies hiring and firing, and I have to say there's been a a lot of people in the last two to three months that have put the the green circle of open to work on and you know started a a post with I find myself in a an unfortunate situation.

And that that used to be quite um rare, seems far more more common now. And again, reading in the paper around the the younger age group that are out of unemployed, I think some of those it suggests on actually looking for work while they're studying now. SPEAKER_01: No, and I think that's because you know they've they've sort of given up almost. But I think you're right.

I mean, I I obviously, you know, we all look at LinkedIn, don't we? And I you're right. I've seen the open to work symbol go up a lot more. And you know, you you just read people's profiles and they're talking about a company restructure, and you know, that's happening so much more than it seemed to last year, even.

Um so yeah, it it wages are continuing to go up. Average earnings are going up by nearly 4%, 3.8% in March. Over the three months to March, they are going up by 4.

1. In the public sector, a little bit more than that, 4.7. So wages are continuing to keep pace with inflation, which is good news for those who have a job.

Yeah, which is positive. But consumer confidence sort of remains in the doldrums, it's languishing really. GFK have their index score, and it's not really we're not really seeing any significant change. It's in May it was minus 23, in April it was minus 25, in March it was minus 21.

So, you know, we see things drop down and then come back up a little, but you know, this is very low compared to even, you know, well, back in, you know, I think we even back in all last summer it was minus 17. So we've dropped down from there, but it's still it's double minus double digit, and it's not really shifting, to be honest. SPEAKER_00: So I think we we've talked about it before in terms of uh we've hoped that we'd speak more positively, but we we seem to be in this circling pattern, don't we, of un of uncertainty.

Obviously, lots going on in the world we've talked about. Certainly in the UK, you've got all the challenges around national living wage coming in, the new employment rights bill, phase one, phase two, TBC next year, which makes anybody who's hiring people wary, which makes anybody who's employing people challenged. It it feels like this is going to be the the new normal was clearly the lockdown phrase. This is this is gonna be the normal now for the foreseeable world events, the war ending, government changes, leadership change, etc.

, they could potentially have a positive effect or or an effect. SPEAKER_01: Well, I think history has taught us that where there's uncertainty, there is caution. Because it filters through from you know investment through to operations through to employment. No one knows what the future is likely to hold, so everyone just stops making decisions really and just waits.

And that impacts everything. So company won't invest and therefore won't employ more people, would be very cautious about giving pay increases. So I think it's we're in a holding pattern, I think, and we will be for a little while. I don't think political uncertainty helps.

I don't, you know, when it's all done and dusted, I think that that's a positive thing, but we've got at least a month or two till that happens. SPEAKER_00: We'll see. Yeah, so there's there's kind of this decision paralysis which filters down from, like you say, the the financial markets through, and yeah, the the figures month on month just show that, don't they? That um unl unless you're set on a I suppose a big pile of disposable income, cash, whatever, savings, you may be up for spending on discretionary stuff everybody else is is waiting.

And I suppose the irony is the longer you wait, the more expensive it gets as well, because inflation just keeps pushing it further and further away. SPEAKER_01: Yes, absolutely, absolutely. And you know, so people are saving and they're cautious about spending, they don't know what the future will hold. Interest rates are unlikely to come down anytime soon.

The Bank of England has said this, so of course more so mortgages will remain where they are for a while. So people, you know, were hoping that they may be two or three hundred pounds a month better off. That's not going to happen for a little while. So people are sort of just being quite cautious.

But having said that, you know, holidays are still in demand, people are still going away. And I think you know, people are shifting their priorities away from things to experiences still. And where they have money, a lot of them will buy an experience rather than stuff. SPEAKER_00: Yeah, no, I agree.

I agree. Yeah, people valuing experience over material things seems to be the kind of way through, doesn't it? SPEAKER_01: It does. And hopefully that's uh hopefully that's a good thing for the hospitality industry because people want to be together.

Hopefully that will keep it going. SPEAKER_00: Fingers crossed. So um let's see if uh we make any progress next month. So May will include the hot weather, got a couple of bank holidays, and got a bit more political unrest as well.

So it'd be interesting to see the figures that pan out there. But we will pause there and I will catch you next month. Thanks, Di. SPEAKER_01: Thanks, Ivan.