Spending held back by low consumer confidence in April
Consumer spending rose by 1.9 per cent year-on-year in April, up from March’s 1.6 per cent rise, according to the latest data from Barclaycard.
April was the second consecutive month of poor performance, with growth down from four per cent in December.
The gloomy numbers have been put down to economic headwinds including slowing wage growth, flat-lining employment rates and uncertainty about the EU referendum.
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Supermarkets were the worst hit sector over the period, with spending shrinking by 6.1 per cent, the worst performance since Barclaycard records began in 2011. Clothing saw a similarly sharp fall, with spending down 3.5 per cent.
The declines are bad news for retailers who have been battling against a slow down in spending over recent months.
“Spending on leisure, travel and entertainment proved to be more robust as consumers protected spending on experiences by cutting back on essentials, which is a pattern we’ve seen for a few months now,” said Paul Lockstone, managing director at Barclaycard. “The wider economic picture will need to improve if we are to see consumers return to the level of spending growth we saw last year.”
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Air travel spend was up by 6.5 per cent, and restaurants racked up a 11.3 per cent rise. These strong performances helped push up overall travel spend by 5.9 per cent and overall entertainment spending by nine per cent, making them the best-performing categories.
Consumer confidence remains subdued however with just 35 per cent of those surveyed by Barclaycard saying they are confident in the strength of the UK economy, down from an average in 2015 of 45 per cent.