Consumer spending online has dipped year-on-year for the first time in four years as consumer concern rises, against a backdrop of slowing wage growth and rising inflation.
The figures, from payments technology firm Visa, indicates that a 0.1% annual fall in ecommerce spending was recorded in April. 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.
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.
Sending 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.
This underscores the importance that the international markets are likely to have for UK ecommerce companies. Political and economic uncertainty is likely to continue throughout this year and beyond. Retailers should devise long term plans to take advantage of rapid growth in cross-border to help reduce risk by selling to a larger, international customer base
The low value of sterling, coupled with UK’s reputation for producing high-end, quality products and leading retail position, means that quality British products are now more affordable for shoppers from overseas. This creates the ideal set of circumstances for growth in cross-border ecommerce in 2017.