February saw consumer spending increase with Valentine’s Day and school half term thought to help drive the extra outlay.
Consumer spending rose by 1.5 per cent according to the latest figures from the Visa UK Consumer Spending Index. This rise compared to just 0.4 per cent in January, which was the lowest rise for five months.
Unsurprisingly, with Valentine’s Day included, the biggest rise was seen in recreation and culture spending, including the traditional Valentine’s Day meals out and cinema trips, which was up 3.3 per cent. Spending on miscellaneous goods and services, which would encompass beauty products and jewellery was also up by 2 per cent year-on-year.
Spending actually reduced year-on-year however, on many other essentials such as food and drink, clothing, household goods, etc. Clothing showed the biggest fall, with a reduction in year-on-year spending of 4.5 per cent, as consumers tightened their belts. Spending on household goods fell by 3.1 per cent, whilst even food and drink spending showed a decrease of 1 per cent.
The internet continues to grow when it comes to consumer spending, with a year-on-year increase of 3.2 per cent in online spending. This certainly seemed to come at the expense of the high street, where spending fell by 3 per cent, the third time in four months that shop sales have shown a decline.
Visa UK and Ireland managing director, Kevin Jenkins, commented: ‘Valentine’s Day and the half term break gave consumers more reasons to dine out and treat their loved ones to short getaways around the UK.’
He continued: ‘At the same time, the level of growth in the leisure and hospitality sectors was softer than we have seen in the past year, showing signs that consumers are becoming more cautious with their discretionary spending.’
Visa compile the index along with IHS Markit, at which economist Annabel Fiddes commented: ‘The outlook for expenditure growth over the remainder of 2017 remains relatively lacklustre, with further increases in living costs expected to lead to a sustained squeeze on households.’
The Visa UK Consumer Spending Index is compiled using Visa card spending figures, which are then adjusted to reflect overall consumer spending.