Shoppers tighten purse strings despite sales

CONSUMERS TIGHTENED their purse strings at the start of 2017 as the January sales failed to stop spending on clothing falling at the fastest pace in nearly five years, according to an index.

Face-to-face spending on the high street recorded an annual fall of 3.1 per cent in January – the strongest decline seen in four years – Visa’s UK Consumer Spending Index found.

Meanwhile, online spending increased by 4.1 per cent year-onyear, marking the slowest growth seen in five months.

Overall, spending was up by 0.4 per cent in January compared with a year earlier, following a 2.5 per cent year-on-year increase in December.

Spending on clothing and footwear fell at the fastest pace seen since April 2012, with a 3.8 per cent annual decline recorded in this category.

Kevin Jenkins, UK and Ireland managing director at Visa, said: “Following a bumper Christmas season, there were signs that consumers were starting to rein in their spending at the start of the New Year.

“Annual growth slowed down from 2.5 per cent in December to a five-month low of 0.4 per cent in January, as households monitored rising prices on everyday items and how this would impact disposable incomes.

“Clothing and household goods retailers experienced a particularly difficult January.

“The traditional start of year sales did little to lift clothing spend, which saw the biggest drop in nearly five years.

“The high street as a whole suffered a disappointing month too, with spend falling at the quickest rate in four years.”

The index uses spending on Visa cards as a base and the figures are adjusted to reflect overall spending, not just that on cards.