Online retailers account for fastest consumer spending growth with four-year high
4 min read
08 September 2015
The power of the internet was demonstrated in August, according to Visa Europe, as online retailers experienced the fastest year-on-year consumer spending growth ahead of the high street – while the recreation & culture industry also made solid gains.
Consumers adopting contactless payments over the past couple of years have been well documented. In July, Visa Europe revealed its European cardholders collectively made some 1.1 billion contactless payments over the year, which amounted €12.66bn.
Following on from that, research at the start of September found that Brits spent £2.5bn via contactless in the first half of 2015 alone – a trend that’s set to grow further as the spending limit increases from £20 to £30 per transaction.
However, contactless was seemingly snubbed in August, according to Visa Europe’s newest consumer spending report, which found that British shoppers spent their money online instead. Indeed, the fastest expenditure growth, 10.7 per cent, was powered by online retailers and accounted for a four-year high – comparatively, high street spending rose by just 1.4 per cent.
It’s likely that this will have been a result of the damp and disappointing final month of summer. Poor weather sent shoppers seeking cover on the bank holiday weekend as they abandoned high streets for shelter at shopping centres and retail parks, while Halfords revealed deflated bicycle sales.
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Of course, online can’t replace some traditional consumer spending habits, thus miscellaneous goods and services, such as hairdressing, experienced a 12.1 per cent spending increase.
Tony Bailey of Top Notch Hair & Beauty in Manchester, said: “Less people walked through the door in August. But those that did, spent more on products and services than usual – the value of transactions was up 11% last month. People seem to be stocking up on haircare products in particular to take on holiday with them.”
Elsewhere, the hospitality industry continued its strong performance as spending in hotels, restaurants & bars grew by 8.9 per cent year-on-year, which is even higher than the 8.6 per cent growth experienced in July.
But it was the recreation & culture sector, which is inclusive of cinemas and theme parks, that appears to be the one to watch. While it’s 6.1 per cent increase wasn’t the largest growth, it was the largest spending increase the market has had to date.
Meanwhile, marginal growth was found in the food & drink and household goods categories at 2.3 per cent and 1.4 per cent respectively, with the former’s representing the fastest growth for six months. Clothing & footwear, however, continued a decline and fell 1.8 per cent.
“Overall it’s been a strong summer for the British tourism industry. Like July, Brits are spending on family fun, meals and entertainment in particular. Indeed we’ve never seen such strong growth in recreation and culture spending in six years of tracking,” said Kevin Jenkins, UK & Ireland MD, Visa Europe.
“The other big winner has been online retailers. While August’s mixed weather didn’t put off family activities, it did create a 10% surge in online spending at the same time. The end of summer online sales likely contributed too to a bumper month for online