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Retailers feeling the pressure as spending falls and consumers shop online

Shoppers tightened their purse strings again in February, with spending in the month down on the same period a year ago, making for the worst start to the year since 2012.
Data from Visa showed a 1.1pc year-on-year decline in consumer spending last month, following on from a 1.2pc fall in January.
Consumer spending has now declined for all but one of the past 10 months, indicating the pressure household finances are under with inflation outpacing wage rises.
Retailers feeling the pressure as spending falls and consumers shop online

The bleak news was compounded by figures from the British Retail Consortium (BRC) and Springboard revealing that footfall - a measure of the number of shoppers out in high streets, shopping centres and retail parks - eased 0.5pc in February on an annualised basis.
The Visa UK consumer spending index produces a snapshot of all consumer spending and not just that on cards, meaning if offers a valuable insight into buying habits.
Britons have been in “belt-tightening mode” since last summer, according to Mark Antipof, Visa chief commercial officer.
He added: “February’s cold snap certainly didn’t alleviate this situation, particularly when we shine a spotlight on high street spending, and recreation and culture in particular, which saw its biggest decline since April 2010.”
The bad weather which ran into the start of March means the next set of data is unlikely to be much stronger.
“As we look ahead into March, consumer spending is at risk of posting one of the worst first quarters on record,” Mr Antipof added. “Retailers will no doubt be hoping that the milder weather will put a spring in shoppers’ steps.”
Growth of online spending continued in February, rising 0.2pc, at the expense of face-to-face purchases, which were down 2.5pc.
Retailers feeling the pressure as spending falls and consumers shop online

Spending in bars, hotels a and restaurants defied the wider drop, and continued its seven-year strengtheeing

Credit:
PA
There were a few bright spots in the data. Spending hotels, restaurants and bars rose 4.4pc, continuing its uninterrupted growth which began seven years ago. Health and education was 3.8pc better, and food, beverages and tobacco edged in positive territory, with a 0.1pc rise. However, recreation and culture fell 6.1pc, transport and communication was 3.5pc worse, clothing and footwear  1.6pc lower, and household goods 1.1pc down.
Despite the negative news on the amount of shoppers heading out to make purchases in February, the BRC did find some solace in the rate of decline being lower than the 0.7pc average decrease over the past 12 months.
Helen Dickinson, BRC chief executive, added: “There’s some hope that shopper activity will pick up now that inflationary pressure has started to subside and wage growth is expected to move in the right direction.”
However, she warned that retailers are facing a “rapid structural change” as they feel the pressure from online shopping and rising operating costs. Recent high-profile failures of familiar shops such as Maplin and Toys R Us are evidence of this, and the BRC chief called on policymakers to act  to help the high street survive.
The figures come as Chancellor Philip Hammond - who is expected to reveal the smallest budget deficit since 2002 in Tuesday’s Spring Statement - said it was too early to ease austerity measures.
Retailers feeling the pressure as spending falls and consumers shop online

Chancellor Philip Hammond has said it is too early to end austerity measures

Credit:
EPA
Speaking on the BBC, he said that the UK’s national debt remains too high at an equivalent average of ?65,000 per household. The Chancellor added: “There is a light at the end of the tunnel… we are still in the tunnel at the moment.”
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