MNI DATA: UK Spending Down At Start Of Q3: VISA

--July VISA UK Overall Spending -0.9% y/y Vs +0.7% y/y in Jun

By Jamie Satchi

     LONDON (MNI) - UK consumer spending pointed to renewed sluggishness at the

start of the third quarter following a weather-boosted run in May and June,

Visa's UK Consumer Spending Index showed Monday. 

     A pre-cursor to official retail sales data, Visa's UK Consumer Spending

Index pointed to a decline in household spending in July. On an annual basis

consumer spending fell 0.9%, down from growth of 0.7% and 0.9% in June and May

respectively. 

     --SHOPPING APPETIETES LOWER

     Face-to-face spending fell by 1.2% in July, snapping the first consecutive

monthly rise since early 2016 registered in June. Though down, the 1.2% decline

was softer than the declines seen earlier in the year. 

     Online activity also disappointed, with eCommerce sales down 0.5% y/y,

after increases of 0.4% and 0.8% in the preceding two months.   

     --WORLD CUP, WEATHER EFFECT

     Food and drink (up 3.5% y/y), hotels, bars and restaurants (up 2.5% y/y)

saw the highest spending increases of all categories in July, with the warmer

climes and major sporting events having continued to provide favourable support.

     Spending on clothing and footwear also rose, up 1.0% y/y, extending the

current run of growth in the sector to three months -- the best performance

since late 2015.     

     --SALES TRADE-OFF

     However, the above came at the expense household good sales and recreation

and culture. The two categories recorded declines of 3.2% y/y and 3.9% y/y

respectively with consumers, whose budgets remain stretched, appearing to shun

the high street in favour of making the most of the sun and sport.  

     Mark Antipof, Chief Commercial Officer at Visa argued July signalled a

return back to the lacklustre trend seen for the most part of the year, bar the

healthier May and June showings. 

     "Retailers had a difficult time in early 2018, and while there was some

respite in May and June, July's fall in spending is concerning, particularly as

we look ahead when the impact of the interest rate rise and back-to-school costs

will likely put further pressure on Britons' wallets," he said. 

     Visa's UK Consumer Spending Index uses card transaction data based on all

Visa debit, credit and prepaid cards. According to Visa, such spending accounts

for an average 2.3billion transactions every quarter, or roughly one pound in

every three spent in the UK.   

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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