Spending cool down weighs on London-listed supermarkets

Early signs of consumers pulling back on spending drove supermarkets lower today in the City, dragging down London’s top indexes.

The capital’s premier FTSE 100 index dropped 0.55 per cent to 7,576.66 points, while the domestically-focused mid-cap FTSE 250, which is more aligned to the health of the UK economy, fell by the same amount to 20,999.02 points.

Fresh data released today by KPMG and the British Retail Consortium revealed households are cutting back on food spending amid one of the worst cost of living squeezes in a generation.

The downbeat data hit sentiment toward London-listed supermarkets.

Online supermarket and middle-class favourite Ocado was worst the performer in the sector, falling 4.32 per cent.

Sainsbury’s fell 2.59 per cent, while Tesco, Britain’s largest supermarket, dropped 1.67 per cent.

Experts are pencilling in a sharp pull back in consumer spending this year due to wages failing to keep pace with inflation averaging over seven per cent across the whole of the year.

Separate figures published by the Office for National Statistics today showed wages are still lagging behind the rate of price growth, meaning people’s living standards are falling

Industrial giants helped offset losses on the FTSE 100.

Oil mega caps BP and Shell advanced 2.41 per cent and 1.43 per cent respectively. The pair represent an enormous share of the index, meaning movements in their share price exert a strong influence over its direction.

Investors were also digesting a fresh US inflation print of 8.5 per cent.

The pound was broadly flat against the dollar.