Visa’s UK Consumer Spending Index, compiled by IHS Markit, indicated that household spending fell for the second month in a row during November. The decline (-0.7% year-on-year) was slightly quicker than that seen in October (-0.2% on the year).
Expenditure has struggled to maintain growth momentum in 2018 to date, with spending falling in seven of the 11 months of the year so far. The latest reduction was predominantly driven by a further fall in Face-to-Face expenditure. Compared to the same month a year ago, Face-to-Face spending declined -0.9% in November, following a -2.0% reduction in October.
At the same time, growth in eCommerce expenditure slowed from +2.6% year-on-year in October to just +0.4% in November.
Adolfo Laurenti, European Principal Economist, Visa, commented:
“Despite the lure of Black Friday, consumer spending slipped again in November (-0.7% year-on-year), as it has in seven of the past 11 months. Face-to-face retail spending fell, while ecommerce spending showed a slight uplift (+0.4% year-on-year) which still disappoints at the onset of this crucial festive season. Despite some easing in inflationary pressures and an improvement in wages and earnings, consumer confidence has deteriorated further, as uncertainty continues to surround Brexit. Economic conditions are likely to remain challenging for retailers, at least in the short term.”
Annabel Fiddes, Principal Economist at IHS Markit, said: “Household spending declined further in November, falling -0.7% compared to a year ago, according to the lastest Visa UK CSI data. Despite hopes that Black Friday sales could tempt shoppers back on the High Street, Face-to-Face expenditure declined -0.9% on the year, while spending through eCommerce channels rose only slightly (+0.4%).
“The disappointing trend reflects relatively subdued consumer confidence as uncertainty lingers over the outcome of ongoing Brexit negotiations. At the same time, businesses signalled the weakest increase in activity for nearly two-and-a-half years in November, according to PMI survey data. Although latest ONS data show pay growth rebounding strongly in recent months, softer rises in living costs and improved confidence regarding the outlook will likely be needed in order for this to translate into improved expenditure trends.”
Visa Inc. (NYSE: V) is the world’s leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network - enabling individuals, businesses and economies to thrive.
Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second.
The company’s relentless focus on innovation is a catalyst for the rapid growth of connected commerce on any device. As the world moves from analogue to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce.
IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions.
IHS Markit is a registered trademark of IHS Markit Ltd. and/or its affiliates. All other company and product names may be trademarks of their respective owners © 2018 IHS Markit Ltd. All rights reserved.