Belfast Telegraph

Online and Black Friday sales help drive 3% spending rise in November

By Vicky Shaw

Consumer spending grew at the strongest rate seen in nearly two years in November - fuelled by a record surge in online activity amid shopping bonanzas such as Black Friday.

Spending increased by 3.2% year-on-year last month, marking the biggest growth rate since January 2015, Visa's UK consumer spending index found.

Within the figures, online spending grew by 12.5% annually in November - the highest annual growth rate since the index started in 2009.

Kevin Jenkins of Visa said: "The Christmas shopping season got off to a good start for consumers and retailers alike.

"Overall spending growth in November accelerated to a 22-month high as consumers made the most of the promotions around Black Friday and Cyber Monday.

"The shopping season seems to have started earlier this year too, as we saw solid spending growth rates in the weeks leading up to Black Friday.

"As Black Friday shifted further online this year, e-commerce retailers were the clear winners in November.

"Online spending grew 12.5% over the last year, the highest rate of growth since our records began in 2009. In contrast, spend on the high street was down 1.4%."

In Northern Ireland shopping centres and retailers have already reported a bumper November. Retailers across the province offered customers a host of reductions - some up to 70%.

And some shops here reported up to a 30% boost in sales.

Michelle Greeves, centre manager at Victoria Square Shopping Centre in Belfast, told the Belfast Telegraph footfall was up significantly on last year.

And jewellery business Argento, which has stores across the province, said sales online rose by almost a third based on the same period a year earlier.

"Black Friday for Argento online was the busiest we have had to date," the firm said.

"We offered our customers great discounts from Pandora, Nomination, Olivia Burton and other popular high street brands.

"We had an increase of 30% from last year and are looking forward to having a very successful Cristmas."

Visa's UK consumer spending index, compiled by IHS Markit, uses spending on Visa cards, which accounts for £1 in every £3 of all UK spending, as a base.

The card figures are then adjusted so that the index reflects all consumer spending, not just that on cards.

Looking at different types of spending, recreation and culture saw the strongest annual growth, with a 9.3% year-on-year increase in spending on this sector.

There was also a sharp increase in spending on health and education, which saw a 5.7% annual uplift.

Spending on miscellaneous goods and services, which includes jewellery and hairdressing, increased by 4.9% annually, while spending on clothing and footwear increased by 2% year-on-year.

Spending on food, beverages and tobacco increased by 0.7% annually, while spending on household goods saw a 3.7% upswing compared with a year earlier.

Hotels, restaurants and bars recorded a 2.2% annual spending increase, while spending on transport and communication was up by 2.1% over the same period.

Annabel Fiddes, an economist at IHS Markit, said: "Whether this strong performance can be sustained into December and beyond is increasingly unclear.

"Notably, consumer confidence has declined in each of the past two months, while forecasts of rising inflationary pressures and unemployment in the next year are all likely to weigh on expenditure growth going forward."

Concerns have been raised in recent months about the extent to which households are going into debt to fund their spending.

Bank of England figures have shown that consumer credit was increasing at the fastest annual rate seen in 11 years in October.

StepChange Debt Charity previously warned that in the run-up to Christmas, there was "real risk" of more people struggling with high levels of persistent debt.

Earlier this week the latest British Retail Consortium-KPMG survey showed non-food sales were up 40% during the week of Black Friday. Like-for-like sales rose 0.6% in November, up from a 0.4% fall in 2015, as the shopping extravaganza on November 25 provided a boost to stores.

Total sales also climbed by 1.3% compared to a 0.7% rise in November last year. Online sales of non-food products saw its third month of double-digit growth but eased back to 10.9% growth from a 11.8% rise for the same month in 2015.

Belfast Telegraph