UK: consumer spending increases by 14.2%
Despite the backdrop of inflation concerns and rising household bills, overall consumer card spending grew by 14.2% in October, compared to the same period in 2019. The latest update comes from Barclaycard
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, revealed that spending on essential items increased by 13.2% (slightly below September’s uplift of 14.4%).
While shopping at supermarkets and food & drink specialist stores grew by 14.2% and by 69.2% respectively, almost four in 10 (38%) consumers report finding it harder than normal to buy essential items due to shortages on the shelves – though this does represent an improvement on last month (46%). Spending on non-essential items rose by 14.6%.
As COVID-19 restrictions continued to be lifted, travel agents and airlines saw much smaller contractions of -26.9% and -28.1% compared to last month. Public transport also had its smallest drop (-20.0%) since February 2020, as more workers returned to commuting by tube, train and bus.
However, in signs that shoppers may be cutting back on retail spending, some categories recorded smaller growth than last month, including clothing (which saw an 8.9% increase compared to 10.1% in September) and department stores, which fell back into decline (-3.1%) after two months of growth.
This comes as almost 9 in 10 (88%) consumers say they are worried about the impact of rising inflation on their household finances (a minor improvement in September, when 90% raised that concern). A similar number (89%) are concerned that rising bills will have a negative impact on their household finances, with 38% of these Brits spending less on nice-to-have items.
Ongoing supply chain shortages continue to weigh on Brits’ minds, with over a third (34%) being so concerned about shortages in stores that they are changing their approach to Christmas shopping this year. As a result, over half (52%) of these consumers are buying Christmas gifts earlier than usual, including toys and other child-related items, with online spend at these stores growing 38.4% in October, compared to just 9.9% in September. Meanwhile, close to three in 10 (28%) are seeking to save money by buying gifts during the Black Friday or other seasonal sales.
Ongoing supply chain shortages continue to weigh on Brits’ minds, with over a third (34%) being so concerned about shortages in stores that they are changing their approach to Christmas shopping this year. As a result, over half (52%) of these consumers are buying Christmas gifts earlier than usual, including toys and other child-related items, with online spend at these stores growing 38.4% in October, compared to just 9.9% in September. Meanwhile, close to three in 10 (28%) are seeking to save money by buying gifts during the Black Friday or other seasonal sales.
Jose Carvalho, Head of Consumer Products, said: “The expensive festive period on the horizon, combined with ongoing concerns around the impact of inflation and supply chain shortages, has meant we’ve seen steady yet cautious spending from consumers in October. While the uncertainty around rising household bills appears to be weighing on Brits’ minds, the encouraging growth we’ve seen in entertainment and international travel shows that consumers are still keen to enjoy leisure activities and holidays. As the nation continues its Christmas shopping and gears up for Black Friday and other sales, we’re confident that November should bring some welcome cheer to retailers.”
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