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Solid increase in September consumer spending, driven by leisure and entertainment activities

Visa Europe | Visa

4 min read Partner content

- Consumer spending continues to rise at a steady rate of +1.8% year-on-year - Solid increases seen across a broad range of categories, with the Recreation Culture and Clothing Footwear sectors among the best performers - Strong growth for e-commerce of +5.8% year-on-year, though high street spending remains flat

Latest Visa Europe: UK Expenditure Index data registered a further marked increase in household spending in September. On an annual basis, expenditure growth was up by +1.8%, unchanged from August. Though solid, the pace of increase was slower than the average annual increase in 2015 so far (+2.4%).

Growth was partly driven by increased spending in Recreation Culture (+7.8% year-on-year) and Clothing Footwear (+6.2%), where both categories saw the strongest increases in expenditure since last August. Hotels, Restaurants Bars also saw a marked rise in spending (+6.6%), while expenditure rose solidly in Households Goods (+4.1%) and slightly in Food Drink categories (+0.5%).

The only sectors to record a fall in expenditure in September were Transport Communication and Health Education.

As has been the case for much of the past two years, e-commerce retailers continued to see a marked rise in spending in September (+5.8%). In contrast, spending fell slightly in face-to-face categories (-0.1%), after a marginal increase in August (+0.3%).

Kevin Jenkins, Managing Director UK Ireland at Visa Europe said:

“Consumers maximised the last of the summer and the camaraderie of the major sporting events in September, with spend at pubs and on entertainment roaring ahead. September was in fact the best month for the entertainment sector in terms of sales growth since last August.

“Clothing retailers were also winners in September. Poor weather in the second half of the month encouraged consumers to ready themselves for the beginning of autumn while also buying last minute school uniforms for the new term. Online retailers profited in particular as consumers capitalised on home deliveries. The high street will be looking for signs of an autumn fillip though after a flat September. With Christmas only 74 days away, any further sign of consumer confidence will be a welcome boost.”

Annabel Fiddes, Economist at Markit said:

“The Visa Europe: UK Expenditure Index saw a further strong increase in household spending at the end of the third quarter, with the majority of expenditure categories noting increased spending. At +1.8%, however, the annual rate of growth was unchanged from August and slower than those seen throughout much of the past year. Softer growth of expenditure coincides with a general easing of growth momentum across the UK economy during the third quarter, as signalled by the PMI business surveys, with concerns of a wider global economic slowdown weighing on the overall outlook.

“That said, record low interest rates and stagnant price trends continue to boost spending power and consumer confidence, and are expected to support a further rise in expenditure as we head into the final quarter of 2015.”

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.

Tony Bailey, Top Notch Hair Beauty, Manchester
“Though the number of visits in September was the same as last year, our turnover increased by 2.1% as consumers treated themselves to more lavish beauty and grooming products. In previous months people were more frugal whilst saving towards holidays abroad, but now that they’re back they don’t mind spending a bit more than usual on pampering themselves. The high street is also bustling with locals again, which led to more spend in the area.”

Quan Nguyen, Chi Café, London
“Our revenue saw a bit of a bounce back in September, as people retuned to work following the summer holiday. The new autumn menu we introduced at the beginning of the month also helped attract more customers and boost sales.”

Pauline Cusack, Glen Guest House, Birmingham
“September was a great month for us. Our guesthouse was busier and new bookings kept pouring in. Along with our regular corporate guests, we were also hosting sporting fans from as far as South Africa and Australia, who came to town to cheer their teams on. Other local establishments also made the most of the additional business with seasonal offers.”

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

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