Visa’s UK Consumer Spending Index, compiled by IHS Markit, signalled that overall expenditure fell modestly in May, down -1.4% on an annual basis. This was quicker than the -0.6% reduction seen in April, and extended the current sequence of declining expenditure to eight months.
Channel data indicated the fall was predominantly driven by lower Face-to-Face expenditure. After broadly stabilising in April, spending through this channel fell -3.6% compared to a year ago. In contrast, eCommerce expenditure rose slightly (+0.7%), which helped to offset a reduction in April (-0.5%).
Adolfo Laurenti, European Principal Economist, Visa, commented:
“Consumer spending slipped further in May, mostly reflecting weak in-shop, face-to-face transactions. While a few temporary factors may have played a role, including the disappointing spring weather this year compared with May 2018, our figures corroborate anecdotal reports of poor sales on high streets and a cautious attitude amongst consumers. Positive growth in ecommerce did not offset the negative trend, but does reflect the shifting patterns of spending – and serves as a reminder that underlying macroeconomic conditions remain quite favourable, despite the downbeat sentiment. Spending at hotels, restaurants, and bars was quite resilient; the largest year-on-year declines were reported for clothing and footwear, where we suspect a weather-related effect, as well as for transport and communication.”
Annabel Fiddes, Principal Economist at IHS Markit, said:
“Consumer spending trends remained lacklustre in May, with overall expenditure falling by -1.4% year-on-year according to the latest Visa CSI data. This weakness has coincided with a slowdown in the UK economy and subdued confidence, as highlighted by recent survey data compiled by IHS Markit. Furthermore, UK PMI data indicated that the economy remained broadly stagnant in May, as Brexit-related uncertainty continued to dampen spending decisions and overall demand. Combined with signs of softer global economic growth, the UK economy faces increasing headwinds in the months ahead, which is likely to weigh on economic performance and spending going forward.”
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 © 2019 IHS Markit Ltd. All rights reserved.