High street spending in worst annual fall in six years

Face-to-face spending on the high street fell by 5.4% year-on-year, accelerating from a 2.9% drop in March, according to the Visa UK Consumer Spending Index - which said the high street remains a “key source of weakness”.

Online spending also dipped, by 0.1% - a gentler decline than the 1.1% fall seen in March.

Visa said that overall, spending fell by 2% annually in April, matching a decrease in March.

Consumer spending has now fallen in 11 of the past 12 months, with the index suggesting that 2018 is on track for its worst performance since 2012.

The index uses spending on Visa cards as a base and adjusts the figures to reflect all consumer spending, not just that on cards.

Annabel Fiddes, principal economist at IHS Markit, which compiles the report, said: “Consumer spending remained relatively weak in April, with no signs of a bounce-back from March when the drop in spend was likely exacerbated by adverse weather.

“Notably, the high street remained a key source of weakness amid recent reports of struggling retailers and store closures, and recorded the quickest drop in expenditure for six years in April.

“At the same time, UK economic growth has slowed, and the recent revival in wage growth has so far failed to translate into improved expenditure trends, adding to fears that spending will remain subdued in the coming months.”

Looking at different types of spending, expenditure on household goods was down 6.1% year-on-year, followed closely by recreation and culture, which fell by 5.6%.

Spending on food and drink fell at the quickest pace since September 2013 - by 4.6% - after an Easter-related boost in March.

Clothing and footwear retailers saw the steepest decline in spend for six months at 3.5%.

Higher spending was registered for health and education, up by 5% annually, and hotels, restaurants and bars, though growth in the latter softened to the weakest for eight months, with a 2.9% annual increase.