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Gloucestershire Business News

More of us are starting to feel the squeeze, says finance boss

Consumer spending has fallen for the first time in nearly four years, according to new figures.

Data from Visa UK, a global payments technology company, suggests expenditure went down by 0.8 per cent last month compared with May 2016.

Following a 0.3 per cent rise in April, it is the first fall in spending since September 2013.

Visa UK found there was lower spending in four out of the eight spending categories, with transport and communication (down 7.9 per cent) and clothing and footwear (down 5.2 per cent) experiencing the strongest rates of reduction.

Household goods (down 4.1 per cent) and food and drink (down 0.6 per cent) also suffered a decline.

In contrast, miscellaneous goods and services, which include hairdressers and jewellery, went up by 7.1 per cent.

Hotels, restaurants and bars (3.3 per cent), recreation and culture (2.2 per cent) and health and education (6.7 per cent) also went up.

Kevin Jenkins, UK and Ireland managing director at Visa, said: "Consumer spending fell for the first time in nearly four years in May, following some marked slowdowns in growth since the beginning of the year.

"Our index clearly shows that with rising prices and stalling wage growth, more of us are starting to feel the squeeze.

"Retailers of non-essential goods were among the worst hit, with clothing and household goods seeing sharp declines in sales.

"The experience sectors continued to record some growth, though at much softer rates, suggesting consumers were reining in their discretionary spending.

"Bricks-and-mortar retailers had a particularly challenging month, with sales dropping at the quickest level in over five years, at a time when warmer weather and the May bank holidays would usually drive shoppers on to the high street.

"Online retailers, on the other hand, fared well, with spend up 6.9 per cent."

What do you think? Email mark@moosemarketingandpr.co.uk 

Picture credit: pixabay

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