Consumer Spending Bounces Back Strongly In September

Consumer spending increased 2.4% year-on-year in September, having been broadly flat in August (+0.1%), according to the latest data from Visa.

Recreation & Culture (+6.8%) and Hotels, Restaurants & Bars (+6.0%) were the best performing sectors. Household Goods saw the annual rate of spending growth quicken from the previous month (+2.3%), while Food & Drink saw a renewed increase in expenditure during September (+2.3%). Clothing & Footwear retailers saw spending fall for the second month in a row on an annual basis, though the rate of reduction eased since August (-1.3%).

Meanwhile, e-commerce expenditure increased at its quickest rate since April (+6.0% on the year), while face-to-face spending was broadly unchanged from one year earlier (+0.1%).

Kevin Jenkins, UK & Ireland Managing Director at Visa commented: “Economic concerns took something of a backseat in September, with consumers reverting to more traditional spending patterns as they took advantage of the last of the summer sun. Overall spend bounced back strongly from a broadly flat August, and was the highest level seen in the past five months at an annual rate of 2.4%.

“Growth was once again driven by the experience economy, as people spent more on meals out, family holidays and trips to the theatre. On the other hand, clothing and footwear suffered another fall in sales, with little evidence of the back-to-school ranges providing any significant boost.

“The gap between e-commerce and high street retailers continues to widen, with the former posting 6% growth, while the latter saw spend remain almost flat.

“Looking at Q3 as a whole, the average rate of growth was unchanged from Q2, but below the level seen in Q1. It is too early to say whether the growth seen in September will continue, and positive signs return more permanently following the soft patch that began in May.”