Online drives Christmas spending

Consumers' Christmas spending was up according to Barclaycard.

But in-store spending struggled compared to digital purchasing.

Total retail spending grew 4.0 per cent year-on-year over Christmas, according to the latest data from Barclaycard, which processes nearly half of all credit and debit card transactions in the UK. But this growth was driven entirely by online shopping, which saw the strongest year-on-year increase since April 2012, jumping 17.9 per cent. The high street suffered tough trading conditions, with in-store spending growth almost static at 0.2 per cent.

The strong performance saw online sales account for a quarter (24.6 per cent) of total spend, which has only once been surpassed, in January 2015 (25.4 per cent).

Department stores were a bright spot on the high street, with in-store spend growing 4.5 per cent, but even here digital dominated, as online spend increased 18.0 per cent, resulting in overall department store growth of 7.2 per cent.

Supermarkets witnessed a similar story: although in-store spend fell 0.7 per cent in December, a boost of 13.5 per cent to online sales meant the category was flat overall year-on-year. Average transaction values at supermarkets fell 4.8 per cent overall as consumers continued to pursue value from their grocery shopping.

December’s online spend growth followed the biggest ever Black Friday, which rocketed 15.1 per cent compared to the same day last year. The average transaction value of online purchases rose 6.6 per cent as well, suggesting shoppers are becoming more confident about making major purchases online. Once again the high street lost out, suffering a 6.7 per cent decrease in spending and a drop of 7.8 per cent in average transaction value. As a consequence, overall spend on Black Friday was down 1.0 per cent versus 2014.

Chris Wood, chief operating officer at Barclaycard said: "In many ways, this Christmas brought to the fore all the shopping trends of 2015. The large spikes in spending, centred around sales days like Black Friday, emphasise consumers’ increasing search for value as they hold back their spending until the best deals emerge. Likewise, whilst online shopping has grown in popularity throughout the year, the strength of consumer preference for digital over the high street was seen in full effect over the Christmas period. As retailers continue to release their Christmas trading updates we expect many to reflect these changing behaviours.

"In terms of what consumers purchased, a large proportion of spend went towards activities and experiences, such as a Christmas dinner out or a night at the cinema. Looking ahead to 2016, it will be interesting to see where UK consumers choose to spend their money, and how the continuing shift towards the purchasing of experiences and services, as opposed to goods, develops and what that will mean for the retail sector."

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