Consumer Spending Falls, Threatening Cash Flow

12th February 2018. 

Businesses and consumers may have to tighten their belts once again as spending hits its lowest level in five years.

Household spending has become an issue since the interest rate rise last November. Borrowing rates have risen along with inflation, and consumers have been forced to think harder about how they spend their money. Retailers suffered a hard Christmas as a result, with fewer consumers walking the streets in search of holiday deals. Online sales have instead risen, with online retailers such as Asos proving a hit with consumers.

Here at the Credit Protection Association, a lot of our members are retailers, some for small companies, some for larger stores. The business culture is changing, with consumers spending less and indulging less. As a result, businesses need to come up with new ways to encourage sales. While the old ways of visual mechanising and free bubbly at store openings may have been effective, the digital age demands new ideas.

According to new research by Visa, household spending fell by 1.2 percent in January, compared to a year ago. This is the first time there has been such a decline since 2013.

A separate survey by Natwest, further found that almost a third of UK households expect their personal finances to weaken in the next 12 months.

This contrasts with the generally sunny picture that is presented by businesses, with the service sector particularly optimistic about its future prospects.

Issues such as sluggish wage growth and rising living costs are weighing on households and affecting their willingness to spend.

In the four weeks to January 27, the presence of shoppers dropped by 1.6 percent compared with last year, data from Springboard showed.

However, it’s not just high streets that are feeling it, with growth in online sales falling to 1.5 percent.

David Scott, head of retail and leisure at Natwest, said: “Consumers are concerned about their levels of debt, which are now at their highest since the financial crisis.

As Brexit rallies, and interest rates are threatening to rise, consumer confidence is falling dramatically. Gone are the days when people threw everything on credit and hoped for the best, and instead consumers are cautious. These financially-savvier customers should be embraced, and businesses should adapt accordingly. Many households don’t have the free time to browse high street shops, so bringing your business online will protect your customers from the  crowds, while incorporating Apple Pay transactions in-store will also encourage a wider net of customers. Digital advertising on popular social sites such as Youtube and Facebook will also generate interest.

Here at the Credit Protection Association we have dealt with many of our retail members who struggle with the new age. Many small businesses fear new technology, and older businesses sometimes fear any change to the traditional business concept. CPA has always encouraged its members when they seek expansion and we boast various credit management products to help them achieve it. Our debt recovery services chase down late payers and non-payers, awarding business owners with the cash flow to fund new enterprises. We also have credit reports and monitoring software that will keep an eye on your customers, to ensure they keep making you money.

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

CPA on Linkedin

CPA on facebook

CPA on twitter

See all our latest news here!

Sign up here to our newsletter to receive periodic links to our best stories and blogs

Keep up to date with the latest news by following us on social media:-

 

Watch the video to find out how CPA can help you!

How to overcome 25 of the most common excuses for non-payment

Click the image to discover step by step advice on how to deal with them!

 

 

 

 

 

Discover how to improve your cashflow in 3 steps.

Click the image to find our answer to the question “How can you get paid on time?”

 

 

 

 

Read our blog – Debt collection agency

Read our Cash Flow Advice

Read about our overdue account recovery service

Read our blog – What is credit management?

Read our blog -What is a credit management company?

Read our blog -Credit Management that works!

Read our blog – How to select a debt collection agency

click to see read about our successes

Please call us on 0330 053 9263 to discuss how CPA can help your cashflow. Alternatively, either email us or use our contact form.

I consent to supplying my personal information that may be used for marketing purposes and agree with the privacy policy.