Saturday, 22 July 2017

UK spending growth ‘at two-year high’

LONDON: The final three months of last year saw the strongest quarterly growth in consumer spending in two years, according to payment card company Visa. Its research, which reflects cash and card spending, showed expenditure rising at an annual rate of 2.8% in the fourth quarter. That was the quickest quarterly growth rate since the end of 2014. The report comes ahead of trading updates this week from Marks and Spencer, Tesco and Morrisons. Last week Next supplied a shock to the retail sector when it reported a disappointing Christmas trading period and warned that conditions would continue to be difficult this year. Next shares lost almost 20% in two days and the warning also hit shares in Mark and Spencer and Debenhams. Analysts think that Marks and Spencer, which publishes its trading update on Friday, can hardly fail to improve on 2015’s Christmas trading, when sales at its non-food business fell almost 6%. Andrew Wade, from Numis Securities, thinks that M&S could report sales growth in clothing and homeware of 1%.

“M&S performed so poorly in clothing and homewares through the third quarter last year, we see a good possibility that the division reports a small positive LFL [like-for-like] outcome this time,” he said. Morrisons releases its figures for the Christmas period on Tuesday, followed by Tesco on Thursday. Analysts are expecting both of those supermarkets to report growth in like-for-like sales of around 1% for the Christmas trading period. For December, Visa’s report showed overall spending increasing at an annual rate of 2.6%, with shops recording a modest 0.7% growth rate, but online spending growth rising by 5.5%. Of all the categories measured, hotels, restaurants and bars saw the strongest expenditure growth, up 7.3%. “Growth was once again led by the experience sector, with consumers going to Christmas markets, travelling to visit loved ones, or venturing to various parts of the country to celebrate,” said Kevin Jenkins, UK and Ireland managing director at Visa.

Check Also

Pakistan-UK

UK reassures continuation of concessions to Pakistani exports

LONDON/ISLAMABAD: Pakistan has been reassured by its biggest trading partner in Europe, that its exports ...