Consumer spending online has dipped year-on-year for the first time in four years as British households were forced to tighten their belts in the face of rising prices and stalling wage growth, the Independent reports.
A 0.1 per cent annual fall in e-commerce spending was recorded in April, according to figures by payments technology firm Visa. This marks the first dip in consumer online spending since September 2013, according to the index.
Overall figures showed consumer spending increased by 0.5 per cent year-on-year in April – the weakest pace of growth recorded in the consumer spending index since the fourth quarter of 2013, as shoppers fretted against a backdrop of general economic uncertainty.
Kevin Jenkins, managing director at Visa in UK and Ireland, said: “Consumer spending slowed down further in April, as consumers tightened their belts in the face of rising prices running up against stalling wage growth. Annual spending growth fell back to 0.5 per cent, from an already subdued rate of 1 per cent in March.”
However, he added that despite the slowdown there were “still some bright spots” and pockets of resilience.
So-called “face-to-face” spending on the high street increased by 0.3 per cent in April supported by a strong Easter with sales of chocolate eggs and hot cross buns helping food and drink spending rise at the fastest rate in three years.
Leisure and hospitality were the best-performing sectors, with spending up by 9.2 per cent year-on-year.
The Visa figures also chimes with data from accounting firm Deloitte published last week, which showed that rising inflation and lacklustre wage growth has hit UK households and sent consumer confidence sliding in the first three months of the year.
Four of Deloitte’s six measures of consumer optimism dropped in its latest quarterly survey, and its overall confidence barometer slipped by 1 percentage point compared with the previous quarter.
“Since last summer’s EU referendum consumer spending has held up well, but with inflation rising and nominal wage growth starting to slow, consumers are beginning to feel a squeeze on their disposable income,” Ian Stewart, chief economist at Deloitte, said.
“In March, the rate of inflation stood at 2.3 per cent, above the Bank of England’s 2 per cent target and the highest in more than two years. There are already some signs that these pressures are contributing to a slowdown in consumer activity,” he added.