Visa Consumer Spending Index August 2019

18 September 2019

Visa's UK Consumer Spending Index declined for an eleventh month in August, down by 1.3% year-on-year, with the pace of slowdown broadly in line with recent months.

Spending volumes fell in six of the eight broad categories in August. Clothing & Footwear remained weakest (-6.4% year-on-year, the fastest decline in nearly two years), followed by Misc. Goods & Services (-3.4%) and Transport & Communication (-3.0%). Household Goods (-2.5%), Health & Education (-2.2%) and Recreation & Culture (-0.6%) slipped back into negative territory following growth last month. Food, Beverages & Tobacco (+1.2%) returned to growth in the month, while Hotels, Restaurants & Bars (+3.9%) continued to report an uplift.

Visa Consumer Spending Index – August 2019

Source: Visa

The decrease in overall spending in August was predominantly driven by weak spending in-store, which has seen no growth for ten of the last 11 months. Face-to-Face expenditure dropped 1.2% year-on-year in August, softening on the 2.9% decline in the previous month.

Ecommerce slipped back into contraction, down 0.5% in August, following a 1.1% increase in July. Nonetheless, its stronger performance compared to physical stores continues to reflect how shopping habits favour online.

It is important to note that Visa expresses growth in volume terms. Adjusting for inflation means Visa’s overall spending data remains well below figures released by BDO in August, but more aligned with the muted results reported by BRC-KPMG.

Visa Consumer Spending Index – Three months to August 2019

Source: Visa, (note – data not adjusted for seasonality)