The report, which reflects overall consumer spending, emphasized the hotels, restaurant and bar industry as the best performing sector, up 6%. Overall it showed consumer spending increased 2.4% year-on-year in September, after a flat August (+0.1%) – the weakest seen in nearly three years.
Visa suggests these are cautious signs of recovery after a spending slowdown that began in May in the lead up to the Brexit vote, and a marked decline following the vote in June.
Kevin Jenkins, UK & Ireland Managing Director at Visa commented:
“Economic concerns took something of a backseat in September, with consumers reverting to more traditional spending patterns as they took advantage of the last of the summer sun. Overall spend bounced back strongly from a broadly flat August, and was the highest level seen in the past five months at an annual rate of 2.4%.
Growth was once again driven by the experience economy, as people spent more on meals out, family holidays and trips to the theatre. On the other hand, clothing and footwear suffered another fall in sales, with little evidence of the back-to-school ranges providing any significant boost.
The gap between e-commerce and high street retailers continues to widen, with the former posting 6% growth, while the latter saw spend remain almost flat.
Looking at Q3 as a whole, the average rate of growth was unchanged from Q2, but below the level seen in Q1. It is too early to say whether the growth seen in September will continue, and positive signs return more permanently following the soft patch that began in May.’
What UK businesses are saying:
Visa is tracking the sentiment of several small businesses across the UK on a monthly basis, asking about their views on the economy, business conditions and forecasts for the month ahead.
Josh Beer, The Illustrious Pub Company, Cambridgeshire:
This was a good month for us with revenue up 6.2% compared to last month. A lot of this was due to the performance of our outdoor catering business, as we were called in to provide food for BBQs, weddings and corporate summer parties.
Overall, sales at our pubs also benefited from the Euros and July’s heatwave. In our site where a large screen TV had been installed sales surged, and among our locations, those that allowed customers to dine al fresco were the best performers.
Quan Nguyen, Chi Cafe, London
September was a good month for us, with sales improving following a distinctly quiet August. Many of our regular customers returned from the summer holidays, and we saw an increase in passing trade from people opting for a staycation in London. The warm and sunny weather might have contributed, as people were more tempted to leave the offices for a nice lunch in the sun.