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.”
LONDON LOVES BUSINESS