Late Easter blamed for slow growth in consumer spending

Visa’s latest spending barometer indicates only modest rise in year-on-year spending

Face-to-face expenditure fell for the seventh successive month, by 0.7 per cent in April, according to new figures from Visa. Photograph: Ben Stansall/AFP/Getty Images

Face-to-face expenditure fell for the seventh successive month, by 0.7 per cent in April, according to new figures from Visa. Photograph: Ben Stansall/AFP/Getty Images

 

Consumer spending rose by a modest 0.7 per cent year on year in April, according to new figures from Visa.

The below-par performance was, however, put down to the changing timing of the Easter weekend, which fell in March the previous year.

Taking March and April together as a whole, expenditure was up 2.4 per cent in 2017 compared with a year earlier.

Visa’s latest index suggests overall spending growth continues to be driven by ecommerce, with online shopping up 3.6 per cent in April on annual basis.

Face-to-face expenditure, meanwhile, fell for the seventh successive month, by 0.7 per cent in April, albeit this was the smallest decline in the year to date.

Visa said the Easter effect impacted different sectors in different ways.

Hotels, restaurants and bars posted the fastest rise in spending, rising 9.4 per cent. There were also solid increases in spending for food and drink, and in the household goods categories, at 6.3 per cent and 5.2 per cent respectively.

Growth was also seen in clothing and footwear (up 1.5 per cent), ending a three-month sequence of contraction.

Although slight growth was recorded in December, the category has seen a consistent decline in spend since August 2016, Visa said.

Declines

Conversely, year-on-year declines were registered in health and education (-5 per cent); miscellaneous goods and services categories (-4.3 per cent); transport and communication(-1.7 per cent); and recreation and culture (-0.4 per cent).

“While the Visa consumer spending index only recorded modest growth in April, the impact of Easter weekend having taken place in March last year has to be recognised as a factor for this,” said Philip Konopik, Visa’s country manager for Ireland.

“ One of the main positives to be drawn from the data is an increase in spending in the clothing and footwear sector,” he added.

“While this might not represent a return to growth for the sector as yet, it comes as welcome news for a sector which has been declining since August last year.”

Andrew Harker, senior economist at IHS Markit, said: “While the shifting timing of Easter is to some extent responsible for the slowdown in spending growth during April, the latest CSI figures are consistent with the recent trend of relatively moderate rises in spending seen through much of the year to date.”