Britons are restricting spending on their food shopping in the run-up to Christmas amid fears over the upcoming Budget, an industry chief has warned.
Karen Betts, Chief Executive of the Food & Drink Federation (FDF), said while seasonal products continue to be sold in high numbers, they are now being picked up instead of, rather than as well as, consumers’ regular shopping baskets.
It marks a shift from typical pre-Christmas shopping patterns, where households traditionally expand their budget to accommodate festive treats and gifts.
"I think what we're seeing... is that where people are buying those items now, they tend to be within their same basket spend, so not as an add-on to a basket that they would otherwise have bought," Ms Betts told The i.
The industry leader warned even if the outcome of the Budget on November 26 was more positive, businesses could still be impacted as a result of the changing consumer habits.
"Even if then the mood of gloom lifts and people do decide to spend into Christmas, you've only got two or three weeks of proper Christmas trading left," she warned.
Elevated food and drink inflation has helped put pressure on the overall rate of Consumer Prices Index (CPI) this year, with households seeing steep rises, particularly for items such as chocolate, coffee, cheese and eggs.
However, the cost of food and non-alcoholic drinks fell between August and September - the first monthly decline since May last year.
Chancellor Rachel Reeves will deliver her Budget on November 26
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Economists think the rate of CPI inflation will have fallen in October.
A Treasury spokesman said: "The Chancellor has been clear that one of her priorities in the upcoming budget is cutting bills.
"Food inflation is falling, and our recent deal with the EU, our biggest trading partner, will help make food cheaper and UK exports easier to support the farming industry. But we know there’s more to do to support working people with the cost of living.
"The tax decisions we took at the Budget last year mean that we have been able to deliver on the priorities of the British people by investing in the NHS helping to cut waiting lists and the Chancellor will continue to prioritise cutting waiting list at the Budget."
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Chancellor Rachel Reeves had been expected to hike income tax at the Budget but ditched the plans last week
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Chancellor Rachel Reeves had been expected to hike income tax at the Budget in the face of a yawning gap in her spending plans.
Last week however, she abandoned the highly contentious plans over fears it could anger both voters and backbench Labour MPs.
One person briefed on the proposals confirmed to GB News the original tax plan had been ripped up.
GB News understands the Office for Budget Responsibility reported better-than-expected figures in its forecast for the Treasury last week, which puts the fiscal black hole at £20billion.
The Chancellor also wants to raise an additional £15billion to £20billion to provide fiscal headroom for future unforeseen spending requirements.
This puts the total needed to be raised at the Budget at £40billion.
While Ms Reeves is no longer understood to be pursuing an income tax hike, tough choices are still said to lie ahead for the Government and other tax rises have not been ruled out.
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