No spending growth in September

Adjusting for seasonality and prices, spending excluding energy declined by 0.4% in September compared to August, driven by slightly lower consumption across both retail and services. The decline in real spending follows two months that saw a mild upward trajectory, leaving spending levels unchanged from beginning of the year.

In September, service spending fell across most categories. Restaurant spending is down both in real and nominal terms, and overall, holiday-related spending decreased. The category was, however, bolstered by relatively large growth in airline spending. Spending in both cinemas and theatres also rose; however, these categories are historically volatile with changing seasonality, making the underlying growth difficult to interpret.

In retail, spending fell slightly in all categories. Nominal spending in grocery stores fell again, while real spending continues to be depressed by rising food prices. Compared to last year, nominal grocery spending is only up 0.9%, while food prices have risen more than 5%, suggesting that households are adjusting their shopping habits with rigour. Only real furniture spending saw an increase, as prices fell, with nominal spending remaining unchanged from August.

Overall, real spending growth has been muted in 2025, as consumers continue their cautious approach to consumption. We expect consumption to pick up somewhat going forward into 2026, supported by real income growth and an additional boost from the sharp reduction in electricity taxes at the turn of the year.

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