Denmark: Holiday back-pay gives significant boost to spending

Danske Research Team Danske Bank A/S

Danish card and MobilePay spending in October, up to and including 12 October, shows spending up by 15% last week, as Danes channel holiday back-pay of more than DKK40bn. (before taxes) towards consumption, leaving little doubt that the money will give a significant boost to private consumption in Q4.

The big winners were in retail, with electronic stores continuing to post record sales. Last week as a whole showed spending in electronic stores more than doubling. DIY stores also saw a significant boost, with sales at 50% above normal last week. With furniture spending up as well, we see clear signs that Danes are spending on improvements at home.

Personal items, such as clothing, footwear and cosmetics are also getting a boost compared with only two weeks ago.

Restaurants continue to struggle following new restrictions to opening hours. However, we have seen some improvement over the past week, going from being down 15% compared with normal at the end of September to 6% below normal last week. Travel spending saw a slight uptick last week but the effect seems to have subsided.

Overall, we are seeing the biggest uptick in spending in categories that have already been doing well over the past six months, while more service-oriented sectors continue to struggle.

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Author

Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

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