Strong spending, but with signs of normalisation
Danish card and MobilePay spending, up to and including 19 October, showed a 10% increase over the last week, but with signs of normalisation in recent days, as Danes return from their autumn holiday and the effect of the payout of holiday back-pay of more than DKK44bn (before taxes) starts to wear off.
We are still seeing high spending levels in parts of retailing, notably electronics stores, where spending over the last week was double that of the same week last year. Home improvement-related spending, such as at DIY and paint shops, was also well above normal, while the increase in furniture spending looks to have been short-lived.
Personal items such as clothing, footwear and cosmetics have also been getting a boost but there are clear signs that the effects are wearing off. The cancellation of many social events could put a damper on spending in these categories over the holiday season.
Restaurants saw spending return to normal over the last week but this is largely due to the effects of the autumn holiday, which, to a much greater extent than normal, took place domestically, where the Danes are more likely to use cards rather than cash.
We had expected that spending would return to more normal levels following the autumn holiday. However, we do expect retail to see strong spending levels in the coming months, with Christmas shopping set to break records.
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.
