Hospitality sector continues to buck trend as consumer spending hits five-year low
Consumer spending in December at hotels, restaurants and bars continued to buck the trend with a 4.7% rise.
The company’s Consumer Spending Index compiled by Markit showed 2017 was the worst year for consumer spending since 2012. On an annual basis, total expenditure fell 1%, which was similar to the 0.9% reduction seen in November.
However, the hospitality sector showed more solid signs with the 4.7% rise in December being a five-month high. This followed a 4.1% rise in November and was the best-performing of the report’s eight broad categories. The only other sectors to show growth were miscellaneous goods and services, which includes jewellery, hair and beauty (1.1%) and food, beverages and tobacco (0.4%).
The overall reduction in household expenditure was driven by lower spending in face-to-face categories as e-commerce saw a further increase in spend at the end of 2017. On an annual basis, expenditure through face-to-face channels fell 2.7% in December. Although this marked an improvement from the 3.5% reduction in November, it extended the current period of decline to eight months.
Spending volumes meanwhile continued to rise across e-commerce categories, rising by 2.0% on the year. However, the rate of expansion was softer than seen in November (+2.4%), and weaker than the average seen over the past few years.
The other five of the eight broad spending categories registered lower figures in December, with the steepest fall in transport and communication (4.4% year-on-year), followed by household goods (3.4%), health and education (2.8%), clothing and footwear (2.4%) and recreation and culture (1.8%).
Visa chief commercial officer Mark Antipof said: “Christmas rounded off a lean year for retailers, with consumer spending seeing its first consistent 12-month decline since 2012. December’s consumer spending figures confirm our earlier prediction that the UK would see its first fall in overall Christmas spending in five years. This result has bucked the trend of the previous four years, which saw annual consumer spending rise by an average of 1.7%. Hotels and restaurants were again a bright spot in December’s results. Consumers have been opting to spend on UK staycations as opposed to physical items and trips abroad.”
Article Credit; propelinfonews.com