E-commerce drives rise in UK consumer spend

Consumer spending in the UK was up 2.6 per cent year-on-year in December, largely driven by online sales, and rounding off the best quarter since 2014, according to the latest figures from Visa.

Visa attributes the continued growth to higher spending to e-commerce categories, as face-to-face expenditure rose only slightly (0.7 per cent year-on-year). Spending volumes online rose 5.5 per cent during the same period, despite the rate of expansion slowing from November’s record high of 12.4 per cent.

Only half of the eight broad spending sectors reported increased expenditure compared to a year ago, with the strongest rate of expansion noted in hotels, restaurants and bars (7.3 per cent). Recreation and culture also saw a marked rise in spending (6.4 per cent), while expenditure in food, beverages and tobacco categories rose solidly (2.9 per cent), while transport and communication saw modest growth of 1.2 per cent.

Kevin Jenkins, UK and Ireland managing director at Visa, commented: “Consumer spending continued to increase solidly in the run up to Christmas, rounding off the fastest growing quarter for two years. Average year-on-year growth for each month in Q4 2016 was 2.8 per cent, twice as high as the average rates for Q2 and Q3.

“Online retailers enjoyed strong sales over the whole Christmas period, while bricks and mortar retailers saw an improvement, after a disappointing dip in November, as consumers made a last minute dash for gifts on the High Street.”

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