Monday 10 October 2016 12:30 am
Consumer spending bounces back in September
The last of the summer sun brightened consumers’ spending habits for September, rising 2.4 per cent on an annual basis. That was the highest level seen in the past five months, according to Visa’s latest Consumer Spending Index update. August had been fairly flat, up 0.1 per cent, which was the weakest seen in nearly three years.
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E-commerce expenditure increased at the quickest rate since April – up six per cent on the year, compared to the minimal increase in face-to-face spending (+0.1 per cent).
Kevin Jenkins, Visa’s UK & Ireland managing director, said: “Economic concerns took something of a back seat in September, with consumers reverting to more traditional spending patterns. Growth was once again driven by the experience economy, as people spent more on meals out, family holidays and trips to the theatre.”
The best performing sectors of recreation and culture and hotels, restaurants and bars were up 6.8 per cent and six per cent respectively. But back-to-school ranges didn’t seem to do much in the way of re-energising clothing and footwear – the sector suffered another fall in sales with a dip of 1.3 per cent. Transport and communication recorded the slowest drop in spending for five months (though still down 2.4 per cent year-on-year).
Household expenditure growth has begun to show a resurgence after a “soft patch” emerged from May, in the lead up to the Brexit vote. Visa’s index suggested spending was getting back on track, with economic fundamentals remaining strong, employment at a record high and real wages on the up, which could foster further increases in spending for the final quarter of the year.
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It also noted though, that there was still ongoing uncertainty over the UK economy which continues to dampen overall consumer confidence and may mean spending growth won’t be as robust as in recent years.