Wet weather fails to dampen consumer sentiment
Wet weather in March may have dragged on high street sales, but a strong leisure spend and growth in the e-commerce sector sees overall consumer figures climbing in the first quarter.
Visa’s Consumer Spending Index for March, published today, shows that wet weather hits the high street, but consumer spending maintains growth at the end of the first quarter.
The figures reveal consumer spending continues to rise 2.3% year-on-year, driven by strong increases in recreation and culture, up 5.6%, and hotels restaurants and bars up by 5.3%. Spending on clothing and footwear fell however, by 1.8%.
Kevin Jenkins, UK and Ireland managing director Visa Europe said: “March saw a solid increase in consumer spending, with the leisure and hospitality sectors big winners, perhaps influenced by Mother’s Day and the Easter holiday falling in the same month. Britons made the most of their free time to enjoy family fun, days out and trips away.”
The report also finds rising spend in the e-commerce sector which rose 4.2%, against a falling appetite for face-to-face expenditure, down 0.9%. Jenkins puts this trend, as well as the delayed purchases of summer clothing, down to wet weather in the period.
"Bad weather looks to have hit demand for spring and summer clothing and kept consumers off the high street,” Jenkins added. “Face to face spend dropped nearly 1% as a result, but e-commerce continues to grow strongly with over 4% growth. As we head into summer, retailers will be keenly awaiting an upturn in the weather, while waiting to see the impact of the living wage on consumer spending.”
Commenting on the figures, Andrea Jenkyns MP for Morley and Outwood who has 15 years experience in retail, said: “It’s great that thanks to the strong and growing economy people have more money to spend.
“We need to make sure we keep supporting our high streets so they don’t fall behind online retailers, but overall the rise in spending in restaurants and bars suggests that our town centres are in very good shape.”
Visa also tracks the sentiment of several small businesses across the UK on a monthly basis, asking about their views on the economy, business conditions and forecasts for the month ahead.
Tony Bailey of Top Notch Hair and Beauty, Manchester, said that proactive use of social media had helped to buoy March sales.
“Despite the bad weather in March, our turnover was up 20% compared to last year. The rain did lead to some cancellations but the customers that were coming through the door treated themselves to more extravagant styles.”
Gayle Haddock, Carry Me Home children’s clothes, London, was not surprised by the figures explaining that “March is usually a steady month for us and this year was no exception,” and that any dip in sales due to her regulars on Easter breaks was offset in part by the release of new season stock.
Quan Nguyen of Chi Cafe, London felt more exposed to the wet weather: “We saw a slight drop in sales in March, perhaps due to the wet and windy weather which prevented people from going out. Many of our customers were away on holiday during Easter and half term too, although this was offset to an extent by an increase in passing trade from people visiting London. We’re working on a new menu for spring and as the weather gets warmer, we’ll hope next month will be better.”
Compiled by Markit, the Index is distinct from Visa Europe’s business performance and reflects overall consumer spending, not just that on cards.
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