According to an index, the high street spending of Households saw its greatest annual decline for six years in April.
According to the Visa UK Consumer Spending Index, the face-to-face spending on the high street dropped by 5.4 percent year-on-year, accelerating from a drop of 2.9 percent last March. The index said that the high street continues to be a “key source of weakness.”
Online spending also declined by 0.1 percent – a gentler drop compared to the 1.1 percent decline observed last March.
Overall, Visa said that the spending dropped by 2 percent annually in April, which is equal to the decrease last March.
Consumer spending has now dropped in 11 of the last 12 months, with the index implying that the current year is on track to have its worst performance since 2012.
The index makes use of spending on Visa cards as a base and adjusts the data to reflect all consumer spending, not only that on cards.
The IHS Markit compiles the report. Its principal economist, Annabel Fiddes, stated: “Consumer spending remained relatively weak in April, with no signs of a bounce-back from March when the drop in spending was likely exacerbated by adverse weather.
“Notably, the high street remained a key source of weakness amid recent reports of struggling retailers and store closures and recorded the quickest drop in expenditure for six years in April.
“At the same time, UK economic growth has slowed, and the recent revival in wage growth has so far failed to translate into improved expenditure trends, adding to fears that spending will remain subdued in the coming months.”
Observing the various types of spending, expenditure on household goods was down by 6.1 percent year-on-year, which is closely followed by recreation and culture, which dropped by 5.6 percent.
Spending on food and drink dropped at the quickest pace since September 2013 – by 4.6 percent – following an Easter-related increase in March.
Retailers of clothing and footwear observed the steepest drop in spending for six months at 3.5 percent.
Higher spending was reported for health and education, up by 5 percent annually, and restaurants, hotels, and bars, though growth in the latter softened to its weakest for eight months, with an annual increase of 2.9 percent.
Talking about the latest figures, the chief commercial officer at Visa, Mark Antipof, said: “Low confidence levels amongst shoppers and the gloomy outlook for the UK economy are likely to have contributed to this continued caution.
“It is clear that consumers remain in belt-tightening mode, with discretionary spending on furniture, electrical appliances and recreational activities worst-hit.
“Retailers will be pinning their hopes on further improvements in household finances and warmer weather leading to a more upbeat few months heading into summer.”