According to data from Barclaycard, which processes nearly half of all UK card transactions, consumer spending in the first part of November fell to an 18-month low as households cut back in anticipation of Black Friday at the end of the month. No doubt we will see the impact on hospitality spending reported in the coming weeks.
Spending fell to just 2.2 per cent in the first three weeks – down from 4.1 per cent in October, and nearly half the 4.0 per cent growth seen last November – as the hype around the US-imported event firmly took hold in the UK.
The number of purchases made in the first three weeks of November slowed in all categories, compared with the previous month, with the exception of cinema/theatre transactions. The sharpest slowdowns were in those retail categories widely expected to see major Black Friday discounts, including clothing, DIY, electronics and furniture.
Total in-store spending fell into negative territory for the first time in two years, with the amount spent on the high street in November shrinking 1.1 per cent year-on-year compared to an increase of 1 per cent in October.
Online spending grew 14.6 per cent (up on 10.2 per cent last November and the 13.8 per cent average so far this year) with Black Friday deals starting earlier this year – Amazon, Argos and Carphone Warehouse were among the retailers starting Black Friday discounts up to a week before November 27.
On Black Friday itself, consumers chose to shop online rather than brave the crowds. Online spending rocketed compared to the same time last year, seeing an uplift of 15.1 per cent. The average transaction value (ATV) of online purchases also rose 6.6 per cent, suggesting shoppers were buying higher priced items online.
Chris Wood, Chief Operating Officer at Barclaycard, said:
“Yet again, Black Friday proved a big draw for consumers this year. Consumers seem to have geared up for the main event this time round, holding back on buying anything other than the bare essentials in the weeks leading up to it. Spending in the three weeks prior to Black Friday fell to its lowest level in 18 months and was just half that of last November.
“Online spending on Black Friday was up 15 per cent year-on-year, with consumers deciding to avoid last year’s in-store stampedes and shop from the comfort of the sofa. As a result the share of spending carried out online jumped from a quarter to just under a third. With consumers now holding back their Christmas shopping until the deals start to emerge, the Black Friday weekend is now firmly established as the biggest shopping event of the year.”