“As we start a new year, cautious consumers are closing the gates, and retailers can expect to see significant downward pressure on demand in the first months of this year,” said Paul Martin, head of UK retail at KPMG.
The lackluster spending has come despite retailers discounting goods more aggressively than in recent years.
Dickinson warned that the disruption to shipments through the Red Sea due to the conflict in the Middle East means retailers are also facing a difficult start to the new year.
“2024 looks set to be another challenging year for retailers and their customers, with spending still constrained by rising costs of living,” Ms Dickinson said. Retailers will also have to juggle various cost pressures, including higher business rates next April.
Barclays data showed that restaurants are suffering, as are retailers.
Total card spending at restaurants fell 8.8%, while the number of transactions fell 13.1%, according to the bank’s consumer card data.
“Whether households are renting or have a mortgage, their disposable income has been significantly impacted, and this has naturally meant a reduced frequency of eating out,” said Simon Stenning, founder of foodservice consultancy Future.