Consumer spending growth in the UK slowed as temperatures fell in March, rising just 2 per cent YoY, lowest since April 2016, as the poor conditions brought by the ‘Beast from the East’ took their toll on the high street. However, expenditure online grew 11.7 per cent as Brits chose to shop from their homes to avoid the extreme temperatures, says a report.
Data from Barclaycard, which processes nearly half of the nation’s credit and debit card transactions, shows that in-store spending fared particularly poorly, contracting 1.9 per cent as a third (34 per cent) of consumers reported the cold weather prompted them to spend less overall on the high street.
Shoppers continued to prioritise the essentials, which rose 3.8 per cent, while spending on the ‘nice-to-haves’ increased by just 1.1 per cent.
Despite the slowdown in March, overall expenditure for the quarter was broadly stable with growth of 3.1 per cent in Q1, down only slightly from 3.2 per cent in Q4 2017 and matching the figure for Q3 2017, according to the report.
Signs of stability also extended to consumer sentiment; 64 per cent of Brits are confident in their household finances, up 10 percentage points from the month prior and the best reading since October 2017. Likewise, the proportion of those confident in the UK economy rose from 34 per cent in February to 37 per cent last month, a seven-month high. Compared to 2017, a third (33 per cent) say they are less confident in their ability to save money for a rainy day.
All in all, a sense of caution still remains; 44 per cent of consumers indicate that they have adapted their spending to cope with rising prices and one in five (19 per cent) are shopping at discount stores more often. The trend looks likely to continue – although the prevailing rate of inflation slowed slightly last month, nearly half of consumers (49 per cent) say they do not plan to change their spending habits any time soon.
“The ‘Beast from the East’ took its toll on the high street in March, keeping shoppers at home and leading to a slowdown in consumer spending. Despite the dip in growth last month, however, expenditure was broadly stable in the first quarter. It seems consumers have become accustomed to adjusting their budget and as a result, are more confident in their own finances. While there are bright spots, however, it’s important to note that a sense of caution still remains, with many of us hesitant to change our spending patterns no matter what the next few months may bring,” said Paul Lockstone, managing director at Barclaycard. (KD)
Fibre2Fashion News Desk – India