Total consumer spending fell by 2 percent on an annual basis in April, according to the latest Visa UK Consumer Spending Index, indicating a further reduction in expenditure at the start of the second quarter. The decline matched that of March which also posted a 2 percent drop.
Consumer spending has now fallen in 11 of the past 12 months on this measure, with the index suggesting that 2018 is on track for its worst performance since 2012, said a statement from VISA.
Face-to-Face channels registered a steep and accelerated decline in spending during April. Expenditure through the High Street fell by 5.4 percent year-on-year, following a 2.9 percent drop in March, to signal the quickest reduction for six years.
In contrast, eCommerce categories saw little-change to expenditure compared to a year ago. Spend on this measure dipped by just 0.1 percent on an annual basis at the start of the second quarter, compared to a 1.1 percent fall in March.
“With inflation beginning to fall and wages growing faster than expected in recent months, it would have been easy to assume we might be over the worst of the consumer squeeze. Yet there has been no corresponding improvement in spending, with April’s 2% decline a simple repeat of what we witnessed in March.” said Mark Antipof, Chief Commercial Officer at Visa.
“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.”
Among the monitored spending categories, Household Goods registered the quickest rate of contraction (-6.1% year-on-year), followed closely by Recreation & Culture (-5.6%). Meanwhile, expenditure in Food & Drink categories fell at the quickest pace since September 2013 (-4.6%), after an Easter-related boost in March.
Clothing & Footwear retailers saw the steepest decline in spend for six months (-3.5%). Transport & Communication and Misc. Goods&Services (which includes health & beauty) also recorded lower expenditure volumes compared to April 2017.
The only two sectors to record higher spending volumes were Health & Education and Hotels, Restaurants & Bars, though the latter rose at the softest pace since last August.