Danske Research Team
Danske Bank A/S
Danish card data suggests that spending excluding energy increased by 7% in January compared to the same month the year before. Adjusting for inflation, spending excluding energy increased by 5.3%. This is the highest growth since March last year, and supports the trend of strengthening consumer spending since we have seen since last fall.
Real retail spending rose 2.1% in January, supported by somewhat higher growth in grocery spending, along with solid spending in sporting goods and cosmetics stores, where the latter continues to show remarkable strength. Clothing, footwear and electronics, on the other hand, did not perform well in January.
January is a crucial month for streaming services, with a lot of subscriptions being renewed. This year, Danes spend more than 21% more on streaming services than last year, constituting a real improvement of a solid 13%.
We also saw improvement across services, with real spending in both restaurants and hotels up by more than 8%. Travel spending was, however, more muted compared to January last year, with nominal growth at around 0 percent. Statistics Denmark indicates that some of the weakness is due to price declines, but generally issues regarding the timing of price changes in travel spending makes the real numbers difficult to interpret in the airline and travel agency categories.
Smaller service spending categories like theatres and tourist attractions also performed well, and cinemas saw significant growth compared to January last year.
Overall, spending continues to improve, as more Danes are seeing their purchasing power restored to pre-inflation surge levels. However, we continue to see very weak consumer confidence, indicating that many are still hesitant to spend.
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