Spending improves slightly through November

Danish card data suggests spending in the first three weeks of November continues to be weak compared to last year. Y/y spending has improved slightly through November. This suggests that we are still not seeing a sharp decline in nominal spending. However, with prices likely increasing further in November, we are still looking at a very significant decline in real spending.

There is little doubt that retailers will experience a noticeably weaker Christmas shopping season that last year and the year before, where covid restrictions on significant parts of service spending send goods consumption significantly higher. In this week’s data, we are seeing some signs of an uptick in retail spending, however, this is also likely driven by the fact that Black Friday is slightly earlier than previous years. We will not know until next week what the performance has been.

Overall, we are more concerned about spending in furniture and other home-related durable goods, not least when accounting for price developments.

In services, we are still seeing some strength especially in restaurants; however, compared to last year we are more or less at the same level nominally. Travel spending is looking somewhat better in recent weeks than in the end of October, but overall, we expect to see weakness here over the winter. The big season for travel shopping is January and February.

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