The Brexit fallout may now be impacting the spending of British consumers.
A report from The Wall Street Journal noted that data released on Friday (Feb. 17) pointed to a drop in retail sales in January, which was the third consecutive month of falling figures.
The noted slowdown in consumer spending comes at a time when there are already warnings about weakening growth of the U.K.’s economy due to Brexit.
Initially, it looked as though last year’s Brexit decision didn’t have much of an impact on how much consumers were spending, with strong sales reported last summer and eventually reaching a 14-year annual high in October.
However, since then, retail sales have continued to shrink, falling by 0.3 percent in January compared to the previous month. According to the Office for National Statistics, the annual rate of growth has also dropped down to 1.5 percent, the smallest expansion in more than three years.
“This is a micro demonstration of what is likely to be happening to the consumer over the whole of 2017,” Alan Clarke, head of European fixed-income strategy at Scotiabank, told WSJ.
Last month, credit company Mastercard said that, while retailers had high hopes U.K. consumers would storm the stores after the holidays to take advantage of steep discounts, pre-Christmas sales overtook sales in January as the preferred time to shop in the U.K. for deals.
Mastercard said 48 percent of people got the bargains in the days right before Christmas compared to 44 percent who took advantage of January sales. What’s more, Brits want better deals, with two-thirds of consumers saying an item has to be discounted by greater than 30 percent to count as a bargain. Twenty-six percent said the item has to be discounted by greater than 50 percent to get them to purchase it, and 37 percent said their expectations about deals are higher than last year.
“The January sales appear to have lost their luster for many shoppers, as sales fatigue has set in,” Mark Barnett, president of Mastercard U.K. and Ireland, said in a press release highlighting the results. “This situation has been heightened by pre-Christmas price cuts. Together with Black Friday and Cyber Monday, they are cannibalizing the Boxing Day and January sales. By the time the New Year discounts hit the shelves, many consumers have already had their fill of bargains.”