- Don-Alvin Adegeest |
Various states of uncertainty negatively affect consumer confidence, as was evident in Visa UK's Consumer Spending Index figures released this week.
Spending dropped in the second quarter to its lowest growth in nearly four years, and even the good amount of sunshine didn't prevent consumers from watching their pennies.
According to the report, spending fell 0.3 percent year on year from April to June, the lowest growth since 2013. High street spending fell 2.4 percent in the same period.
According to visa, fashion and footwear sales fell 0.5 percent, with homeware down 3.4 percent. Sales of jewellery increased with services and miscellaneous goods up 5.7 percent.
Kevin Jenkins, managing director at Visa UK and Ireland said the effect of inflation is fueling shoppers’ habits towards spending money on essentials. “The recent heatwave and summer sales have failed to reverse the high street’s fortunes, with face-to-face spend falling for the second consecutive month. On the other hand, e-commerce spend continued to grow, albeit at a slower rate compared to May.”
Annabel Fiddes, an economist at IHS Markit, is quoted in the Associated Press: “The marked deterioration in household expenditure trends since last year comes at a time when households are facing an increasingly challenging scenario of rising living costs and weaker wage growth. Consumer confidence has also been dampened by uncertainties linked to the outcome of the ongoing Brexit negotiations, the inconclusive General Election result, as well as relatively lacklustre growth across the UK economy.
Photo credit:Bond Street shoppers, source New West End company blog, www.newwestend.com