Consumer spending hits four-year low
CONSUMER spending declined yet again in July, marking the steepest decline for four years, figures from Visa have shown.
The payments technology firm’s UK consumer spending index showed spending by shoppers dropped 0.8 per cent last month, the third consecutive month of declines and the longest period of deterioration since February 2013 when households shrunk their spending for five months.
The steepest reduction was seen in transport and communication, down 6.1 per cent annually, followed by clothing and footwear, which dropped 5.2 per cent.
However, consumers spent six per cent more in hotels, restaurants and bars, while recreation and culture expenditure went up 1.3 per cent.
Kevin Jenkins, UK & Ireland managing director for Visa, said the overall decline was largely driven by a fall in face-to-face expenditure, down 3.7 per cent, while e-commerce channels saw a 3.6 per cent boost.
“The figure provides further evidence that rising prices and stagnant wage growth are squeezing consumers’ pockets,” Jenkins said.
“The drop in spending was felt across a broader range of retail sectors last month, with clothing, household goods, food and transport among the worst hit.
“There were still some bright spots in July, with hotels, restaurants and bars reporting a 6 per cent increase. The sector is likely to have benefited from an early surge in summer staycations, as the weak pound made holidaying at home more attractive.”
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