High street sales suffer as shoppers tighten belts
THE pre-Christmas trading season got off to a poor start for retailers, with consumer spending declining at the fastest annual pace seen in over four years, according to an index.
Spending declined for the fifth time in the past six months in October, with clothing retailers being the worst hit, according to Visa’s UK Consumer Spending Index.
Overall spending fell by 2 per cent annually in October, marking the quickest decline seen since September 2013.
Visa said the cooldown appeared to be driven by a sustained fall in face-to-face spending on the high street, which was down by 5 per cent compared with a year earlier.
Annual growth in online spending slowed to 2.2 per cent in October, from 2.8 per cent in September.
Looking at types of spending, clothing and footwear saw a marked annual fall with a 9 per cent year-onyear decline – the worst drop seen since the series started in mid-2009.
Recreation and culture registered the fastest decline in spending since 2011, with a 2.9 per cent annual fall, while food and drink retailers saw the strongest spending reduction since 2014, with a 2 per cent decline.
By contrast, miscellaneous goods and services, which includes jewellery, hair and beauty, registered a 6.5 per cent increase.
Spending also increased by a “relatively subdued” pace of 3.2 per cent across hotels, restaurants and bars, according to the index. The report uses spending on Visa cards as a base and then adjusts the figures to reflect all spending, not just that on cards.
Mark Antipof, chief officer – commercial at Visa, said: “The preChristmas trading season got off to a poor start for retailers.”
He continued: “The figures are a stark indicator of the strain on household budgets even before the Bank of England’s recent interest rate rise. Clothing retailers were the worst hit, suffering from the fastest drop in spending since the Index started in 2009.
“The unseasonably warm weather didn’t help, but the sector has been struggling to increase sales since the beginning of this year.
“This is reflected more broadly in the high street performance, with spending falling for the sixth month in a row. In contrast, e-commerce continued its upward growth trend as consumers moved even more of their shopping online.”
He continued: “Retailers will now be pinning their hopes on strong performance around Black Friday and Cyber Monday. November’s data will therefore provide the first real clue on how Christmas is shaping up.”