Visa reports fall in Christmas spending
Payments business Visa has reported a 2.3 per cent fall in spending on credit and debit cards over the four weeks to 27 November, compared with the same period in 2010.
Last week, which is traditionally one of the UK’s biggest Christmas shopping weeks, spending on cards fell both on the High Street and online, with sales 6.2 per cent lower than in the equivalent week last year.
John Lewis also reported slower trading, supporting Visa’s figures and suggesting that consumers are cutting down what on Christmas spending this year.
In the week to 26 November, the retailer’s sales fell 1.2 per cent compared with a year earlier.
Retailers have been hit by a fall in consumer confidence due to uncertainty over the economy, rising unemployment and an increase in household costs, including steep rises in the price of energy.
This week, John Lewis’s sales were up 10.5 per cent in the four days to 20 November, compared with last year, however this time last year the UK was covered in heavy snow which caused shoppers to stay at home.
Visa, which accounts for one in every four pounds spent, said that the poor trading figures may just indicate that shoppers are leaving it later to do their Christmas shopping than last year.
Despite signs that shoppers are tightening their purse strings, recent research by MoneySupermarket.com found that 25 per cent of people in the UK expect to go over budget this Christmas.
Based on an average expenditure of £437 on Christmas presents, food and alcohol, and an average credit card APR of 18.44%, MoneySupermarket.com warns that Christmas spending could cost an extra £70.20 in interest by Christmas 2012.
The comparison site is encouraging shoppers to make sure their credit card is appropriate for their needs.
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