Online spending dips for first time since 2013 as wages stall
CONSUMER SPENDING online has dipped year-on-year for the first time since 2013, according to an index.
A 0.1 per cent annual fall in ecommerce spending was recorded in April – marking the first decline since September 2013.
By contrast, face-to-face spending on the high street increased for the first time this year so far, with a 0.3 per cent annual uplift in April. Overall, consumer spending increased by 0.5 per cent year-on-year in April, marking the weakest pace for three months, Visa’s UK Consumer Spending Index found.
The report said the increase in face-to-face spending is likely to have been supported by the Easter holidays – with sales of chocolate eggs and hot cross buns helping food and drink spending rise at the fastest rate in three years.
The fall in e-commerce spending follows an 8.2 per cent increase recorded in March.
Looking at different types of spending, hotels, restaurants and bars were the best-performing sector, with spending up by 9.2 per cent year-on-year.
Meanwhile, food and drink retailers posted the steepest increase in spending for three years, with a 5.9 per cent increase, while spending on clothing and footwear increased by 2.3 per cent – the strongest spending uplift for six months.
Spending on recreation and culture, which includes cinemas and bookshops, was up by 2.8 per cent year-on-year although this was the slowest growth seen in this category for eight months.
Spending on health and education was down 9.5 per cent yearon-year, while spending on transport and communication saw a 9.2 per cent year-on-year fall.
The index, compiled by Markit, uses spending on Visa cards as a base and adjusts the figures to reflect overall consumer spending, not just that on cards.
Kevin Jenkins, UK and Ireland managing director at Visa, said: “Consumer spending slowed down further in April, as consumers tightened their belts in the face of rising prices running up against stalling wage growth. Annual spending growth fell back to 0.5 per cent, from an already subdued rate of one per cent in March.
“While overall figures suggest that clouds are gathering over British consumers, there were still some bright spots. Easter and the extended half-term break may have contributed towards a strong uplift of over nine per cent in the hospitality sector.”
Easter and half-term contributed towards a strong uplift. Kevin Jenkins, UK and Ireland managing director at Visa.