Danske Research Team
Danske Bank A/S
Danish card data suggests that spending increased by 2.7% in June compared to June last year. That is an improvement from May, where year-over-year spending increased by 0.8%. Compared to 2019 June, spending was up 17% in nominal terms.
Retail spending increased by 5.2% compared to June last year. That is the highest yearover-year growth rate since January 2022, and the second month in a row with nominal retail spending growth. June 2023 is just the fourth month since March 2022 with positive retail spending growth. If goods inflation continues to come down, retail spending starts to look quite strong overall. We will have to wait for Danish CPI on Monday to evaluate how retail spending performs in real terms.
Especially grocery spending increased rapidly through June and was 9.7% higher than a year ago. We still saw significant food inflation in May at around 11%. This means that food inflation does not have to decline much more in June before we actually see a positive real growth in grocery spending. According to Statistics Denmark around 45% of retail trade companies selling food and beverages expect to lower their prices over the next three months.
Travel spending continues to be around the same level as a year ago. This is also what we see for other services like restaurants and hotels. Cinemas continue to perform badly, while concerts and theatres perform very well compared to a year ago.
We have seen an upward trend in spending in 2023, supported by lower inflation, stronger wage growth and continued stability around energy prices. Figures from the last few months show that consumers have increased their spending a little more the last few months than we saw earlier in 2023.
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