14 Feb 2019

Spending by householders flat in January as bills for Christmas arrive

Filed under: Business News

Spending by householders was flat last month as the bills for Christmas arrived.

New figures from the Visa Consumer Spending Index show expenditure in shops was down 5pc in January, but online spending was up almost 10pc.

This meant overall consumer spending was up just 0.01pc in January compared with a year ago.

In a separate survey, one in five people said they were in debt in January because they overspent at Christmas.

The research, commissioned by One4All, found almost half of people say that January is the most difficult month of the year financially.

Visa, which measures spending using cash, cheques and electronic payments, said falling consumer confidence had led spending being pulled back last month.

The index has been showing for months now that shops remain the key source of weakness for household spending.

Visa Ireland’s country manager Philip Konopik said: “Once again, there was a notable contrast between the high street and e-commerce with online retailers recording almost double-digit growth, while the high street saw the sharpest fall in expenditure since we started the index.”

He said the clothing and footwear sector’s challenges have been highlighted after recording a seventh consecutive month where spending declined.

Read more: The world of payments is changing and Ireland has the ability to lead the way – Visa Ireland chief Philip Konopik

There was a fall-back in spending on clothes and footwear, the seventh consecutive month of decline, with a drop of 5pc year on year.

But the purchasing of household goods was up 8.4pc.

A rise in prices in hotels, restaurants and bars, blamed on higher valued added tax being imposed on the hospitality sector, did not hold back spending. There was a 4.4pc increase in expenditure in the month compared with a year ago.

The spending index is compiled by HIS Markit.

Its associate director Andrew Harker said the results indicate that “falling consumer confidence” led to spending being pulled back las t month.

“This is particularly the case on the high street as households head online to search out bargains in an uncertain economic and political environment,” he said.

Meanwhile, a fifth of people were in debt last month because of overspending at Christmas, according to research by gift card issuer One4all.

The financial strain of Christmas is even more significant for people with children.

More than a third of those with kids between the age of six and 12 report that they ran into debt in January after borrowing or using credit cards to pay for Christmas.

The research found that the financial pressure of Christmas causes one in three people to feel anxious or stressed, with this figure increasing for those with children under the age of 12.

Article Source: http://tinyurl.com/kbwqb42

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