November the new December as online shopping leads to to seasonal shifts

November the new December as online shopping leads to to seasonal shifts

Christmas shopping is getting progressively earlier as shoppers migrate to the internet to buy gifts, according to the Payments Council’s research into the latest spending data.

It said credit and debit card spending on the High Street is increasing in November, relative to December. In 2010 this increase was marked; the total amount UK consumers spent with retailers in November (£11.2bn) was over five-sixths (84%) of the December total (£13.3bn), excluding food and fuel.

By comparison, in 2009, November was just 80% of the December total (£13bn). In 2008, it was just over two thirds (69% of December’s £12.7bn) – although the shock of the Lehmans collapse and the start of the recession in the UK would have contributed in that year.

The council said that taking a longer view of all card spending over the last decade confirms this pattern. At the beginning of this century, November’s spending was nearly 2.5% smaller than December’s, by the middle of the decade spending during the two months was exactly equal and over the last two years November spending has exceeded December by 2.27%.

Less credit, more debit

However, while UK shoppers are rushing to use our cards online, particularly at Christmas, we are not using borrowing to fund our shopping habit. Almost all of the increase over the last five years on total card spending was on debit cards (£97bn, compared with £4bn on credit cards); a pattern that was repeated in 2010, where total spending on cards was up by 7% (9% on debit cards, as opposed to 2% on credit card). Credit card repayments also increased by 8% in 2010 and outstanding credit card credit was at its lowest level since the beginning of 2004.

Cheque usage has fallen by 13% over 2010, as payments have migrated online or to other automated methods; further evidence of our move to the virtual high street. Cash payment volumes have also fallen over the last year by 5% and the number of Faster Payments peaked again in the fourth quarter (Q4) 2010 when 120 million payments benefited from immediate transfer. The majority of these Faster payments were made online.

Sandra Quinn, Payments Council director of communications, explained: “The internet has really changed the way we shop at Christmas, with many of us choosing to shop on line to get the best deals and to avoid the shops at the busiest time of year, but you need to start early. That’s why there is a distinct shift in spending towards November. This has only been possible with the vast expansion of card usage in the UK.

“Even the looming increase in VAT, which flattered December’s spending, wasn’t enough to mask the rise of November. The problems of dispatching Christmas goods through the heavy December snows last Christmas mean this year, people are likely to get even more organised and get their orders in online early. Looks like we’re going to have to learn to love those early Christmas adverts.”