Online spending grows at fastest rate for 16 months
Reflecting trends towards both a more digital and experience-based economy, Visa Europe’s Consumer Spending Index for April reveals a swelling appetite for leisure, and the fastest growth in online spending since December 2014.
Visa’s Consumer Spending Index for April reveals the largest spike in online spending since December 2014, as high street sales struggle with wintery weather.
Minister of State for the Digital Economy, Ed Vaizey, lauded today’s figures as a reflection of Britain’s evermore tech-savvy consumers, and encouraged businesses to make the most of a “more digital Britain.”
"The UK has one of the most developed digital economies in the world and is a nation of early adaptors of technology,” said Mr Vaizey. “So the rise in e-commerce comes as no great surprise.”
Visa’s figures show online spending growth hit a 16-month high in April, up 8.4% on the same period last year, whereas face-to-face spending remained relatively flat at 0.2%.
“The average British person spends around £1,500 online each year,” the Business Minister added, “and we want all UK businesses to make sure they're taking advantage of the opportunity the internet offers, helping us to build a stronger and more digital Britain."
Overall, the Index reveals solid growth in UK household expenditure of 2.5% year-on-year, with the largest gains seen in the ‘experience economy.’
Growth in leisure sectors far outstripped other categories in April, with recreation and culture up 7.9% on last year, and hotels bars and restaurants up by 6.6%.
Kevin Jenkins, UK and Ireland managing director at Visa Europe, commented: “Growth in consumables remains evident, but consumer spending is increasingly focused on the experience economy. Eating out, booking holidays and discovering new experiences are all driving spending growth at a time when the lower cost of living is creating higher disposable incomes.”
Household goods rose by 3%; food and drink by 1.7%; and only slight growth of 0.6% was recorded across transport and communication.
“A very strong month for online sellers suggests much of the experience economy is being driven by pre-booking of activities online,” he added. “While online prospered, face-to-face spending was relatively flat, highlighting the current discussion about the future shape of the high street as well.”
The only sector to report reduced expenditure was clothing and footwear, down 2.8% year-on-year, where poor weather was likely to have affected the sales. Furthermore, the rate of reduction quickened from that seen in March, which fell 1.7%.
Annabel Fiddes, Economist at Markit said that the wintry weather in April did mean that the high street lost out overall, with spending broadly flat from the previous year.
“The prolonged spell of poorer weather also reduced sales at clothing and footwear retailers for the second month in a row,” she added, “as people put off purchasing their spring/summer ranges.”
Visa also tracks 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.
Gayle Haddock of Carry Me Home children’s clothing in London, was exemplary of the trends, saying that despite the poor weather “April was actually quite a good month,” largely thanks to an increased focus on her online customers.
“Our online sales in particular have surged,” she said, “as more regulars take to our website to quickly get hold of the items they’re after. Social media partnerships with ‘instmums’ and online competitions have also helped to increase our online presence and have allowed us to reach customers further afield.”
The Visa Europe UK Consumer Spending Index is based on spending on all Visa debit, credit and prepaid cards which are used to make an average of over 2.3 billion transactions every quarter and account for £1 in £3 of all UK spending.
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