Consumer spending over the past two months has seen the strongest spending reduction for the start of a year since the opening two months of 2012, as consumers continue to tighten their belts.
According to Visa’s UK Consumer Spending Index, households’ spending showed a 1.1 per cent year-on-year fall in February, following a 1.2 per cent decline in January.
For the 10th month in a row, face-to-face spending on the high street fell annually, with a 2.5 per cent decrease.
Meanwhile, online spending increased slightly compared with a year ago, with a 0.2 per cent uplift.
Recreation and culture spending also dropped 6.1 per cent year-on-year in February – the biggest fall since April 2010 – while spending fell on clothing and footwear, household goods, transport and communication.
Hotels, restaurants and bars were the silver lining in the figures, with spending up by 4.4 per cent year-on-year.
This was followed by a four per cent uptick in miscellaneous goods and services, which includes health, beauty and jewellery.
Visa’s index uses spending on Visa cards as a base and then adjusts the figures to reflect all consumer spending, not just that on cards.
“Britons have been in belt-tightening mode since last summer,” Visa chief commercial officer Mark Antipof said.
“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.
“On the other hand, hotels, restaurants and bars experienced another strong month. The resilience of this sector is somewhat unique, having reported uninterrupted growth since February 2011.”
He added: “As we look ahead into March, consumer spending is at risk of posting one of the worst quarter one results on record.
“Retailers will no doubt be hoping that the milder weather will put a spring in shoppers’ steps.”