Mar 13, 2017
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Valentine's fashion offer not enough to boost UK February spend says Visa

Mar 13, 2017

Recent UK retail sales data may have been depressing for anyone in the retail sector but a new study from Visa offers a few more reasons to be cheerful for some, even though the fashion sector has little to smile about.

Valentine's product was less of a consumer focus than eating out in February

The credit and debit card giant’s Consumer Spending Index showed Britons spent 1.5% more in the 12 months to February than in the previous 12 months.

That was up from the anaemic 0.4% increase in the year to January that had seen spending hitting a five-month low and came even though inflation has been rising noticeably this year. But even though spending rose, it looks like inflation may be having some effect as the 1.5% was below last year’s average 2% rise, suggesting consumers are becoming more cautious.

But the big question is, what what were they buying last month? Unfortunately it was not fashion, or at least not in the numbers retailers might have wished as there new spring lines dropped din-store. And they did not appear to be rushing to make their homes look better either.

Visa UK said spending on clothing and footwear fell by the biggest percentage of all categories (4.5%) and household goods spend also fell (3.1%) as Britons diverted their discretionary cash to restaurants, bars and cinemas.

While the survey did not mention the kind of restaurants, bars and cinemas consumers were visiting, it looks like the data supports the long-held view of analysts at the British Retail Consortium and footfall tracker Springboard that the leisure mix is hugely important to retailers in shopping centres. When consumers do spend money on fashion in-store, they are more likely nowadays to have visited that store as a by-product of a cinema or restaurant trip.

That data also showed that online spending was up by 3.2% year-on-year in February, but face-to-face spending fell 3%, for its third drop in four months.

Kevin Jenkins of Visa said of the data: “Valentine’s Day and the half-term break gave consumers more reasons to dine out and treat their loved ones to short getaways around the UK.”

That may not have brought much solace to fashion store, but while their sales slumbered last month, Visa said spending on “miscellaneous goods and services,” which includes jewellery and beauty products, rose 2%.

Visa’s Index is compiled in association with IHS Markit and Annabel Fiddes, an economist at the research firm, said: “The outlook for expenditure growth over the remainder of 2017 remains relatively lacklustre, with further increases in living costs expected to lead to a sustained squeeze on households.”

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