Cold weather slows consumers spending growth in UK: Report
Consumer
spending growth in the UK slowed as temperatures fell in March, rising
just 2 per cent YoY, lowest since April 2016, as the poor conditions
brought by the ‘Beast from the East’ took their toll on the high street.
However, expenditure online grew 11.7 per cent as Brits chose to shop
from their homes to avoid the extreme temperatures, says a report.
Data
from Barclaycard, which processes nearly half of the nation’s credit
and debit card transactions, shows that in-store spending fared
particularly poorly, contracting 1.9 per cent as a third (34 per cent)
of consumers reported the cold weather prompted them to spend less
overall on the high street.
Shoppers
continued to prioritise the essentials, which rose 3.8 per cent, while
spending on the ‘nice-to-haves’ increased by just 1.1 per cent.
Despite
the slowdown in March, overall expenditure for the quarter was broadly
stable with growth of 3.1 per cent in Q1, down only slightly from 3.2
per cent in Q4 2017 and matching the figure for Q3 2017, according to
the report.
Signs
of stability also extended to consumer sentiment; 64 per cent of Brits
are confident in their household finances, up 10 percentage points from
the month prior and the best reading since October 2017. Likewise, the
proportion of those confident in the UK economy rose from 34 per cent in
February to 37 per cent last month, a seven-month high. Compared to
2017, a third (33 per cent) say they are less confident in their ability
to save money for a rainy day.
All
in all, a sense of caution still remains; 44 per cent of consumers
indicate that they have adapted their spending to cope with rising
prices and one in five (19 per cent) are shopping at discount stores
more often. The trend
looks likely to continue – although the prevailing rate of inflation
slowed slightly last month, nearly half of consumers (49 per cent) say
they do not plan to change their spending habits any time soon.
“The
‘Beast from the East’ took its toll on the high street in March,
keeping shoppers at home and leading to a slowdown in consumer spending.
Despite the dip in growth last month, however, expenditure was broadly
stable in the first quarter. It seems consumers have become accustomed
to adjusting their budget and as a result, are more confident in their
own finances. While there are bright spots, however, it’s important to
note that a sense of caution still remains, with many of us hesitant to
change our spending patterns no matter what the next few months may
bring,” said Paul Lockstone, managing director at Barclaycard. (KD)
Source: The Indian Express, India Tuesday, 17 April 2018