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High street enjoys a strong return in January

Visa Europe | Visa

3 min read Partner content

- Consumer spending rose +2.7% on an annual basis in January, the highest growth rate since May 2015 - Clothing Footwear surged +5.0% from a dip in December, thanks to cold weather and January sales - High Street spending bounced back to an eight-month high

The latest Visa Europe UK Consumer Spending Index data signalled a strong expenditure performance at the start of the year. On an annual basis, consumer spending was up +2.7%, from a +2.2% rise in December, and the strongest year-on-year increase for eight months. Higher expenditure was also seen on the monthly (+2.7%) and quarterly (+1.1%) measures in January, suggesting that underlying growth momentum remains robust.

Sector data indicated that growth was led by spending in Hotels, Restaurants Bars (+9.7% year-on-year) and Recreation Culture (7.8%) sectors. That said, expenditure also rose solidly in Clothing Footwear categories (+5.0%), which offset a marginal fall in December (-1.2%). Strong increases in expenditure were also seen in Household Goods and Food, Beverages Tobacco sectors.

Consumer spending continued to increase at a marked pace through e-commerce channels in January (+4.6% on the year), despite the rate of expansion slowing since December (+7.3%). Expenditure also rose through face-to-face categories (+2.5%), after it was broadly flat in December (-0.1%). Furthermore, the latest increase in face-to-face spending was the strongest seen since last May.

Kevin Jenkins, UK Ireland Managing Director Visa Europe said:

“It’s a feel good start to the year for retailers and consumers, despite the global economic jitters. Spending rose most prominently on the high street, though it still looks to be prudent rather than excessive at this stage.

“Leisure and hospitality continue to outperform as sectors, but clothing and footwear retailers were the real winners after a disappointing dip in December. The arrival of the winter weather, combined with January sales, saw spend on warmer wears surge 5%. While e-commerce spend continues to grow strongly as ever, this is a clear statement by the high street that it can still attract customers.”

What UK businesses are saying: 

Visa is tracking the sentiment of several small businesses across the UK on a monthly basis, asking about their views on the economy, business conditions and forecasts for the month ahead.

Pauline Cusack, Glen Guest House, Birmingham - January was an excellent month for us with business up almost 20% compared with last year. Our guests, many of whom are local contractors are benefitting from more work being available and this has led to longer stays in our guest house. We expect this trend to continue as we’ve already had many enquiries in for next month. Recently we’ve noticed a lot of expansion and construction in our area, and local pubs guesthouses are already benefiting from the development.

Wendy Dalton, Blush Boutique, Oldham - We’ve had a remarkable January. As expected, many of the people that received proposals over the Christmas period have been through our doors to place their orders. The business has also benefitted from a growing social media and online presence. Customers also appear to be making the most of the information at their disposable, and are looking for the best offer without sacrificing quality.

Quan Nguyen, Chi Cafe, London - We were off to a good start this year, with January sales picking up from a rather quiet December.  Our regular customers spent more, and we also saw new customers through our doors, perhaps because of the January health kick. We’ve also started a delivery service which we hope will help us expand our sales and customer base in the coming months.

Read the most recent article written by Visa Europe - Latest spending figures show record highs




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