It was the biggest decline since last April and saw expenditure in physical stores falling 1.6% at the height of the Christmas shopping season. However, e-commerce spending rose 0.5%, which was higher than November’s 0.4%, even though November’s e-tail had been boosted by Black Friday being a largely-online event in the UK.Looking at 2018 as a whole, spending fell in eight months of the year, largely driven by a disappointing performance in physical locations.

Back with those December figures, fashion was one of the categories to suffer the most, even though markdowns were widely used to drive traffic and despite it being the gifting/partywear season that should have driven sales upwards. Visa said that clothing and footwear sales fell as much as 2.2% year-on-year, which would have been bad news on its own but it also came after a 2.5% drop in November and a 2.8% fall in October.Meanwhile, ‘miscellaneous goods and services’, which includes both the beauty and jewellery categories, tipped into negative territory with a 1.5% drop after having recorded higher sales in both of the previous two months. It’s unclear whether either of the beauty or jewellery segments recorded lower sales, but they do make up a large chunk of that miscellaneous category so are unlikely to have been buoyant last month.The question is, as with all such spending analysis reports, how reliable is it? We have to assume it’s pretty reliable as it uses card transaction data as an indicator of total consumer expenditure across all payment methods. It’s based on spending on all Visa debit, credit and pre-paid cards which account for £1 in £3 of all UK spending. The figures are also adjusted for factors such as card issuance, changing consumer preferences to pay by card rather than cash and inflation. Adolfo Laurenti, European Principal Economist at Visa, said: “The further decline in UK consumer spending in December is a disappointment, but not a surprise. Notwithstanding a backdrop of low unemployment and rising wages, households remained very cautious at the end of the year – as they were for most of 2018.”But he added that “the modest pickup in e-commerce points to the resilience of digital channels of distribution, a favourable long-term trend that recent woes have not derailed.”Annabel Fiddes, Principal Economist at IHS Markit, added: “December’s CSI data show a disappointing end to 2018, with household spending failing to pick up in the run-up to Christmas. The sustained fall in expenditure throughout the fourth quarter of 2018 coincides with a marked drop in consumer confidence, as uncertainty around the UK’s impending exit from the EU continues to dampen sentiment.“Alongside relatively weak UK PMI survey data, which signalled muted business activity in December, the spend figures add to evidence that the UK economy is likely to have slowed in the final quarter of 2018.”