Aside from moody March skies, new research from Visa shows Q1’s overall decline in spending harkens to low consumer confidence in the economy
The Beast from the East flurried customers away from UK high streets in March. However, new research by Visa shows a broader decline across all of Q1’s consumer spending means the grey British weather can’t be entirely blamed.
As part of Visa’s monthly UK Consumer Spending Index, IHS Markit, the information analysis service, discovered that consumer spending dropped by 2.1% year-on-year in March following a 1% decline in February and 1.2% in January. Moreover, face-to-face sales slumped by a staggering 4% in January compared to last year, which grew marginally to 2.4% in February. However it crashed to 3% by the end of the quarter. Interestingly e-commerce saw slight yet still unimpressive increases across the first two months but the miserable March weather nonetheless saw digital sales fall into the negative for the first time in ten months and at a faster rate since 2012.
Commenting on the findings Mark Antipof, chief commercial officer at Visa, said: “The negative impact that the Beast from the East had on UK economic activity last month has been widely reported but this doesn’t entirely explain March’s lacklustre consumer spending. We are in the midst of a dip in consumer confidence and this – coupled with other economic factors – is causing shoppers to continue to restrain themselves.”
“High-street sales suffered once again [but it’s] too early to read a great deal into this year-on-year decline, which should be viewed in the context of high growth rates in early 2017.”
It could be that the Brexit blizzard more so than the cold weather took its toll on consumer confidence as an economic factor for the first quarter. And with one year left to go until the deadline is up, it remains to see if retailers can weather the Brexit storm better next year.