Retail spending growth weakened in January

British consumers are reining in their spending after the Christmas period, with footfall to the UK’s high street shops also declining.

Figures released today by Visa (Xetra: A0NC7B - news) show that growth in spending weakened to 0.4% in January, from a much more robust 2.5% in December.

Face-to-face spending - that is, purchases made in person rather than online - declined at its quickest rate in four years, while digital commerce continues to grow.

Kevin Jenkins, UK and Ireland (Other OTC: IRLD - news) managing director at Visa, said some of the decrease could be attributed to inflation as rising prices for everyday items take their toll on disposable household income.

"Clothing and household goods retailers experienced a particularly difficult January," he said.

"The traditional start of year sales did little to lift clothing spend, which saw the biggest drop in nearly five years.

"The high street as a whole suffered a disappointing month too, with spend falling at the quickest rate in four years."

But Mr Jenkins pointed out that, although high street spending is down, it isn't all doom and gloom in the UK economy, with the hospitality industry seeing a significant uplift.

"Brits continued the trend of spending on experiences rather than goods, with a near 6% spending boost in the hotels, restaurants and bars sector and a 3.1% lift in recreation and culture spend," he said.

The drop in high street spending was borne out by footfall figures published today by the British Retail Consortium and research firm Springboard, which showed visitors to Britain's brick-and-mortar retail stores fell by 1.3% in January compared to the same month last year.

This marks the steepest decline for six months.

Helen Dickinson, chief executive of the British Retail Consortium, said the drop was "fairly consistent" across different retail locations.

"Stores bore the brunt of the sales slowdown, posting their deepest three-month decline on record as online was the preferred shopping channel for the month's clearance sales," she said.