The UK will have its busiest shopping day of the year today, 23 December, Visa Europe told CNBC, in what will be seen as long overdue relief for struggling retailers in the UK.
Dr Steve Perry, commercial director of Visa Europe, said, “We will see about 1.5 billion pounds being spent in the UK today, up about 8 percent this year compared to last year.
To give some perspective to that over the course of 2011 we’ve seen about 1 billion pounds ($1.5 billion) worth of spend each day, so it’s a massive rise compared to the average spend.” Visa Europe also predicts it will process a total of 33 million transactions today.
Figures from the British Retail Consortium, the retail industry’s trade association, support the pre-Christmas splurge by shoppers with a rise in shopper numbers of 2.3 percent in the week beginning 12 December on the same week last year.
The UK high street has seen a number of retailers slashing their prices with sales and promotions in the run up to Christmas in a bid to entice shoppers. Traditionally the promotions and sales start post-Christmas.
However, with consumer sentiment hit hard with rising unemployment, wage freezes, rising inflation and sluggish growth all under the coalition government’s austerity program, retailers have had to dig deep.
The financial crisis of 2008 prompted the UK to take a closer more critical view of its love of cheap credit during the preceding boom years.
The UK economy relies heavily on consumer spending and has had a relatively high debt to income ratio compared to other developed nations.
Dr Perry acknowledged that the gloomy and unpredictable macro economic picture in the UK was harming consumer confidence and affecting their confidence to spend.
“Consumers are not sure where the economy is going so they are taking their time and being cautious,” Perry added.
In a move against what some consumers see as ‘excessive surcharging’ by credit card companies, the UK government announced it would be cracking down on what it deemed ‘opaque, excessive and misleading’ charges by credit card companies.
Credit card companies and retailers have been accused by consumer watchdogs of adding excessive surcharges to transactions made using credit and debit cards without being transparent to the card holder.
In an implementation of EU legislation excessive surcharging will be outlawed and consumers must be told in advance of any extra costs they may face.