MNI DATA: Worst Quarterly Consumer Spending in 5 Years: VISA

--March VISA Overall Spending -2.1% y/y Vs -1.0% y/y in February

By Jamie Satchithanantham

     LONDON (MNI) - The UK's lethargic consumer spending run showed no signs of

abating in March, with lacklustre sales growth taking quarterly household

outlays to a five-year low, data from Visa revealed Monday.

     A pre-cursor to official retail sales data, Visa's UK Consumer Spending

Index pointed to a further slide in household spending in March, with consumers

and businesses blighted by the bad weather. Year-on-year, consumer spending was

down 2.1%, extending the respective falls seen in January (-1.2% y/y) and

February (-1.0% y/y).

     That meant that over the quarter, Visa's measure of consumer spending was

down 1.4% when compared to Q1 2017, the worst quarterly performance since Q4

2012.

     --EASTER IMPACT

     The data, however, is non-seasonally adjusted and given Easter fell

entirely in April last year, the associated timing effects will have attributed

for a large chunk of the March slide. 

     The only sectors to register growth in March were food and drink (5.7% y/y)

and hotels, restaurants and bars (4.2% y/y), likely boosted by Easter

celebrations. 

     Both face-to-face spending and online spending took a hit in March.

Face-to-face sales were down 3.0% y/y in March, following falls of 4.0% and 2.4%

in January and February respectively.    

     --ONLINE SALES FALL

     Online sales growth, positive in both January and February, also found room

to contract in March, down 1.2% y/y. This was the first fall in 10 months and 

suggests the weather alone was not to blame for the tapered spending appetites

but that confidence remains fragile.      

     "The negative impact that the 'Beast from the East' had on UK economic

activity last month has been widely reported, but this doesn't entirely explain

March's lacklustre consumer spending. We are in the midst of a dip in consumer

confidence and this - coupled with other economic factors - is causing shoppers

to continue to restrain themselves," Mark Antipof, Chief Commercial Officer at

Visa, said.

     Visa's UK Consumer Spending Index uses card transaction data based on all

Visa debit, credit and prepaid cards. According to Visa, such spending accounts

for an average 2.3billion transactions every quarter, roughly one pound in every

three spent in the UK.   

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

[TOPICS: MABDS$,M$B$$$,M$E$$$]