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Consumer spending grew 0.2 per cent in August, the first uplift since February, as Brits enjoyed the last of summer

07 Sep 2020 19:01

  • Spending on essentials grew 5.1 per cent, with the number of fuel transactions returning to similar levels seen last year
  • Clothing spend increased for the first time since March 2019, as shoppers took advantage of end-of-season sales
  • Spending at pubs and bars was a bright spot, with 9.3 per cent growth in transactions – the first uplift since lockdown began
  • Confidence in the UK economy fell to 19 per cent, yet household confidence remained steady as holidaymakers postponed trips abroad
  • The Barclaycard report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending

Consumer spending grew 0.2 per cent year-on-year in August – the first uplift since February 2020 – as Brits enjoyed the last of summer by socialising and holidaying in the UK. 

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew 5.1 per cent year-on-year, largely driven by supermarket shopping which was up 14.9 per cent.

While lower prices at the petrol pump contributed to fuel spend declining 13.3 per cent, the number of transactions returned to similar levels seen last year, down just 2.4 per cent, as Brits embarked on staycations and gradually started returning to workplaces.

Spending on non-essential items contracted 1.6 per cent – the smallest fall since the onset of lockdown – as the nation became more comfortable visiting stores. In a positive sign for the retail sector, clothing saw growth of 0.3 per cent, the first increase since March 2019, as shoppers took advantage of end-of-season sales. Spending at department stores also saw improvement, with the smallest drop (-3.6 per cent) in the category since February 2020.

Despite a steady return to the high street, the data indicates the months of lockdown have accelerated a sustained shift towards online shopping. The highest category increases are seen across supermarkets, which showed a considerable 102.7 per cent year-on-year rise as the popularity of online food orders prevailed, and online clothing, which grew 24.3 per cent.

Spending at pubs and bars** was a bright spot, with year-on-year growth in transactions of 9.3 per cent – the first uplift since the start of lockdown – as punters took advantage of the last of summer by socialising with friends and family.

However, while some Brits enjoyed getting out and about, it seems lockdown has also increased the shift towards online when it comes to meal times too. Takeaways & fast food saw their highest increase (20.7 per cent) since tracking began for this category in September 2019, while meal subscription services rose by 65.8 per cent as fresh, hassle-free dinner options became a mainstay in many households.  

In a hopeful sign for the leisure sector, hotels, resorts & accommodation saw their smallest decline since lockdown began, at -19.1 per cent year-on-year; an improvement on July (-29.9 per cent) as holidaymakers booked staycations during the school summer holidays. However, travel – including airlines and travel agents – declined by 61.0 per cent compared to August 2019, as international travel restrictions and quarantine guidelines continued to impact the sector.

While the nation’s confidence in the UK economy has fallen to its lowest (19 per cent) since Barclaycard started the Index six years ago (compared to 42 per cent in January and February 2020), confidence in household finances remains steady at 68 per cent. This can perhaps be attributed to the fact that 45 per cent have saved money because they were unable to go abroad this summer, with nearly a quarter (23 per cent) putting the money into savings instead.

Raheel Ahmed, Head of Consumer Products, said: “It’s encouraging to see the first uplift in spending after such a turbulent time for retailers. It seems the final throws of summer have spurred households to get out and about with clothing stores, pubs and bars welcoming growth for the first time since lockdown began. 

“However, despite the high-street showing some signs of recovery, challenging times still lay ahead in certain sectors. Months of lockdown has helped accelerate the trend towards digital, with surges in areas such as online ordering of takeaways and buying groceries online, meaning the road to recovery may still be a long one for bricks-and-mortar stores.

“Retailers may take reassurance from the fact that household confidence remains steady, and of course, the restaurant sector also benefitted from the boost provided by the Eat Out To Help Out Scheme. As this discount comes to an end, and the lure of pub gardens slip away with the sunshine, we will see the resilience of businesses truly tested as we head into autumn.”

  Pure Spend Growth Pure Transaction Growth
     
Essential 5.1% -6.5%
Non Essential -1.6% 4.4%
     
OVERALL 0.2% 0.5%
Retail 17.1% 5.1%
Clothing 0.3% -2.6%
Grocery 18.4% 1.7%
Supermarkets 14.9% -3.0%
Food & Drink Specialist 54.7% 39.1%
Household 21.0% 18.9%
Home Improvements & DIY 22.9% 26.3%
Electronics 17.0% 13.5%
Furniture Stores 22.4% 10.3%
General Retailers 25.8% 14.7%
General Retailers & Catalogues 40.2% 26.9%
Department Stores -3.6% -10.1%
Discount Stores 25.0% 7.9%
Specialist Retailers 10.3% 0.9%
Pharmacy, Health & Beauty 3.2% -6.6%
Sports & Outdoor 22.7% 9.7%
Other Specialist Retailers 10.0% 5.7%
Hospitality & Leisure -32.2% -14.4%
Eating & Drinking -0.1% -1.8%
Restaurants -39.1% -39.8%
Bars, Pubs & Clubs -0.2% 9.3%
Takeaways and Fast Food 20.7% 2.8%
Other Food & Drink -0.8% -3.2%
Entertainment -42.8% -37.2%
Hotels, Resorts & Accomodation -19.1% -19.2%
Travel -61.1% -38.6%
Travel Agents -69.5% -57.0%
Airlines -64.5% -56.6%
Other Travel -48.2% -36.9%
Other -1.4% 10.1%
Digital Content & Subscription 29.6% 35.1%
Fuel -13.3% -2.4%
Motoring 5.1% -4.1%
Other Services -4.4% 7.9%
     
Online 10.6% 29.5%
F2F -6.7% -8.6%


Notes to editors

In the coming months, the Consumer Spending release will be based on a slightly adjusted dataset, following the launch of UK Spend Trends 2.0. The new offering builds on Barclaycard’s strong history of publishing insights about UK consumer spending, and provides an in-depth view into consumer spending across more than 250 industries, customer age demographics as well as online and in-store purchases.

*Established in 2014, Barclaycard issues a monthly press release commenting on consumer spending trends.

Barclaycard sees nearly half of the nation’s credit and debit card transactions, which provides us with unique insight into UK consumer spending. The monthly spending data in this press release is based on Barclaycard credit card and Barclays debit card transactions, and is analysed by the Barclays Market and Customer Insights team. It relates to the period 25th July 2020 to 21st August 2020. It is compared with 27th July 2019 to 23rd August 2019.

The consumer confidence survey in this press release was carried out between 21st August and 24th August 2020 by Longitude Research on behalf of Barclaycard. There were 2,002 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.

**This category includes pubs, bars, and clubs, with clubs making up less than 2% of the overall figure.

For more information, please contact please contact Polly Ewell at polly.ewell@barclaycard.co.uk or on +44 (0)7882 088 493.

About Barclaycard

Barclaycard, part of Barclays Bank PLC, is a leading global payment business that helps consumers, retailers and businesses to make and take payments flexibly, and to access short-term credit. In the UK we process nearly £1 in every £3 spent using credit and debit cards, and in 2019 we processed over £272bn in transactions globally. We also partner with a wide range of organisations across the globe to offer their customers or members payment options and credit.

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About Barclays Market and Customer Insights

Barclays Market and Customer Insights helps businesses keep up to date with spending trends, monitors their market position and enhances their understanding of customer behaviour, based on actual customer spending. Visit insights.uk.barclays/MCI or email contact-MCI@barclays.com