Black Friday shopping discounts 'failed to lift consumer spending' in November
CONSUMER spending is poised to fall this Christmas for the first time in five years, according to an index.
Households' expenditure fell by 0.9 per cent annually in November, despite shopping bonanzas such as Black Friday, according to Visa's UK Consumer Spending Index. It marked the third month in a row of declines.
Visa's report said the latest reduction kept spending on track to potentially see its weakest calendar year performance for spending growth in five years.
Face-to-face spending on the high street fell by 3.5 per cent annually in November, while online spending increased by 2.4 per cent annually.
Visa recently predicted that spending across the whole of the festive season will be lower than it was a year ago - the first drop since 2012.
Mark Antipof, chief officer - commercial at Visa, said: "Festive cheer was in short supply for the UK's retailers during last month as Black Friday promotions failed to lift consumer spending.
"November's poor performance means that we stand by our earlier prediction that the UK will see its first fall in overall Christmas spending by consumers since 2012."
He said cutbacks on big-ticket items such as car purchases and bookings for Christmas trips abroad were behind an annual fall in spending on transport and communication in November.
By contrast, he said, there was evidence of the "lipstick effect", with people opting to buy smaller treats such as cosmetics and beauty treatments, rather than making big-ticket purchases.
Spending on transport and communication was down by 6 per cent annually, while clothing and footwear spending fell by 2.1 per cent, household goods spending declined by 2 per cent and food and drink spending was down by 1.8 per cent.
By contrast, spending on miscellaneous goods and services, which includes jewellery and hair and beauty, increased by 4.9 per cent annually and spending on hotels, restaurants and bars increased by 4.2 per cent annually.
Visa's index, compiled by IHS Markit, uses spending on Visa cards as a base and adjusts the figures to reflect all UK consumer spending, not just that on cards.