LONDON (Reuters) – British shoppers cut back spending for the first time in almost a year last month, reflecting a mix of seasonal pressures and Brexit worries, the British Retail Consortium said on Tuesday.
Consumer spending has until now been a relative bright spot for the British economy at a time when business investment has fallen due to uncertainty about when and how Britain will leave the European Union.
Britain had been due to leave the EU on March 29, and is still at risk of a chaotic exit on Friday if Prime Minister Theresa May fails to secure another delay this week.
The BRC said total sales at its members – mostly major high-street retailers and supermarkets – had dropped by 0.5 percent year-on-year in March, after a 0.5 percent rise the month before, the first fall since April 2018.
The fact that Easter holiday spending will fall in April this year could only account for part of the decline compared with last March, BRC chief executive Helen Dickinson said.
“Brexit continues to feed the uncertainty among consumers,” she said. “While jewellery, beauty products and clothing purchases were all up to indulge on Mother’s Day, shoppers were generally cautious not to overspend, particularly on larger items.”
Separate figures from payments company Barclaycard covering overall consumer spending – which includes entertainment and travel as well as shopping – were more upbeat.
Year-on-year, spending by consumers grew by 3.4 percent last month, the biggest increase since October.
Barclaycard said spending at pubs, restaurants and garden centres saw particularly big year-on-year gains, as mild weather this March contrasted with unusually icy weather a year ago.
However Brexit continued to be a worry, with 69 percent of consumers Barclaycard surveyed lacking confidence about the economic outlook, the highest since the survey began in 2014.
“Underlying sentiment is cautious. March was characterised by ongoing uncertainty around Brexit, with consumers concerned about an impact on food prices and supplies,” Barclaycard director Esme Harwood said.
(Reporting by David Milliken, editing by Andy Bruce)