Consumer spending in the UK dropped by 2 per cent in October, the fastest year-on-year decline in four years, according to credit card provider Visa.
The latest fall represents the fifth monthly decline in the last six months, and was driven by a 5 per cent monthly decline in spending on the high street.
The worst hit sector was clothing and footwear which saw sales fall by 9 per cent on an annual basis, the biggest year-on-year decline since Visa started publishing the data in 2009.
Falls were also seen in the recreation and culture sector, down by 2.9 per cent, that lartgest decline since March 2011.
Food and drink fared little better, with the 2 per cent drop experienced in that sector the largest since March 2014.
What is traditionally seen as the start of the Christmas spend has started very poorly, with the British Retail Consortium (BRC) also reporting a drop in the number of people going shopping last month. Footfall on the high street declined by 2 per cent year-on-year in October, the biggest fall since the Brexit vote at the EU referendum.
Retail parks, which are normally resilient to declines, also saw a drop in the number of visitors.
Marketing and insights director at Springboard, Diane Wehrle, commented: ‘Both high streets and shopping centres are clearly under pressure, with footfall during retail trading hours dropping by more than 3 per cent in each.
‘And the fact that retail park footfall slipped into negative territory – even during daytime hours – whilst prior to November recording seven consecutive months of growth, is definitive evidence of consumers tightening their purse strings.’
Regarding the results of the Visa survey, Mark Antipof, Visa chief commercial officer, confirmed that the crucial Christmas trading period had not started well.
He said: ‘The unseasonably warm weather did not help, but the clothing sector has been struggling to increase sales since the beginning of this year. This is reflected more broadly in high street performance, with spending falling for the sixth month in a row.’
The rise in the base interest rate is not expected to help the consumer spending slump over the next few months, according to Visa.
Several UK retailers have reported underwhelming financial results in recent weeks, with Next reporting a 7.7 per cent drop in high street takings in the three months to 29 October.