Danske Research Team
Danske Bank A/S
Danish card and MobilePay spending, up to the week ending on 10 January, show a drop in spending of 16% compared to the first week of 2019. The decline is driven by a drop in physical spending of almost 40% compared to the same week in 2019, whereas online sales remains elevated.
Note that the base year is 2019, not 2020, in order to compare to a year unaffected by COVID-19.
The weakness is mainly driven by extensive restrictions, in place until at least 7 February. There are some distortions due to the exact timing of New Year's Eve, but there is little doubt that the new restrictions are having a significant impact on spending.
The restrictions on a number of retail stores show up clearly in the data. DIY spending, furniture spending and spending in shoe stores and clothing shops all took a dive, as online spending was not enough to compensate for the decline in physical stores.
Restaurants, cafés and bars also saw a sharp drop in spending, with takeaway being the only category holding up.
The start of the year is typically the high point for travel spending, as people start planning for the summer holiday. However, compared to normal (2019), spending remains down by 80-90%, despite a more positive vaccine outlook.
We do not expect to see a significant improvement in the data until the economy opens again, though the next release will give a clearer picture, as the distortions from the turn of the year leave the data.
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