Consumer Spending Increases As Services Sector Sees Surge
Expenditure through e-commerce channels increased by 3.2%, highlighting the importance of small businesses being online
UK consumer spending rose by 1.5% in February, with shoppers’ appetite for the services sector a major driving factor – a new report by Visa has revealed.
After hitting a five-month low in January (+0.4%), four out of the eight broad spending sectors reported an increase in growth – with recreation and culture (+3.3%), goods and services (+2.0%), and hotels, restaurants and bars (+1.2%) the best preforming.
Expenditure through e-commerce channels also increased by +3.2%, while face-to-face spending dropped by -3.0%, highlighting the importance of businesses being online.
Clothing and footwear was the worst-performing sector, with transport and communication also reporting lower spending in February.
Kevin Jenkins, UK & Ireland managing director at Visa said:
“Following a marked slowdown in January, consumer spending restored some momentum in February. Overall spend grew at an annual rate of 1.5% from a low point of 0.4% in the previous month.
“Growth in the experience sector continues to be a significant driver. 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. 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.
“And for clothing retailers, February was yet another challenging month, recording the biggest drop across all the sectors that we track.
“Notably, online retailers continued to enjoy strong growth, while the high street trailed behind, declining for the third month in the last four.”