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February Floods Dampen Strong Start to Consumer Spending in 2014
London, UK, 14th March, 2014 – MasterCard Advisors’ SpendingPulse™, a macro-economic report tracking national retail and service sales, today revealed that UK retail grew 1.9% year-on-year in February. In a month dominated by heavy rain and flooding, retail figures suffered a considerable drop compared to the promotion-fuelled growth of January.
The slowdown was felt across most sectors, with the exception of grocery and jewellery. Both managed to maintain and improve their growth rates respectively, with the latter benefitting from a stronger appetite for Valentine’s Day spending this year compared to 2013. The clothing and food and drink sectors were also boosted by amorous British shoppers but still felt the effect of the overall slowdown.
Children’s clothing sales were assisted by the half term break; however, inclement February weather and flooding also appear to have taken their toll in clothing sectors too, as spending levels remained below what was seen last year.
The overall slowdown impacted the normally resilient ecommerce sales in February after two months of very strong year-on-year growth. However, despite the cool results, the growth rate remains comfortably above the average for 2013.
Sarah Quinlan, Group Head and Senior Vice President at MasterCard Advisors, observes:
“The pace set by January’s results has proved hard to maintain in February. The extensive flooding and adverse weather conditions across the UK this month dampened discretionary spending; however, Valentine’s Day provided a much needed highlight across sectors. March will be a pivotal month to indicate whether spending will get back on the path to consistent and solid growth in the UK reflecting increased consumer confidence.”
Marion King, MasterCard UK and Ireland President, said:
“While the UK economy has shown improvements, with both inflation and unemployment rates declining in recent months, it appears that UK consumers are not yet convinced of the resilience of the recovery. February’s cool growth is disappointing; however, as the UK economy continues to gain strength it should increase consumer confidence. Spring’s warmer weather will add a brighter boost to the retail sector in the coming months too.”
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SpendingPulse™ Data Source: A macro-economic indicator, SpendingPulse reports on national retail and service sales and is based on aggregate sales activity in the MasterCard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and cheque. MasterCard SpendingPulse does not represent MasterCard financial performance. SpendingPulse is provided by MasterCard Advisors, the professional services arm of MasterCard Worldwide.
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MasterCard Advisors, a division of MasterCard Worldwide, provides clients around the world with insights and solutions that drive business impact and ROI. The company uses advanced analytics and deep payments expertise to translate data into actionable behavioral insights and customized services. With more than 80 billion anonymized transactions processed annually in 210 countries worldwide, the company leverages aggregated information and a consultative approach to help financial institutions, merchants, media companies, governments and other organizations grow their businesses. For more information, go to www.mastercardadvisors.com.
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