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Consumer spending grows by 3.9 per cent in January as Brits fill up on fuel and food

Mon Feb 10 19:01:00 EST 2020

  • Spending on fuel increased by 4.3 per cent and supermarkets saw growth of 3.7 per cent
  • Cinema spend jumped by 22.0 per cent as crowds flocked to watch 1917, and travel agent and airline spend grew as consumers looked to their next holiday
  • Confidence in the UK economy reaches its highest in more than three years
  • 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 3.9 per cent year-on-year in January, marking a distinct uplift from the low levels of growth seen in 2019. Consumers are feeling upbeat about the country’s economic prospects, with three quarters confident about their household finances.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items rose by 3.7 per cent. Rising prices at the petrol pump* drove much of this growth, with fuel spending increasing by 4.3 per cent. Supermarket spending was also a contributory factor, with the category up 3.7 per cent.

Spending on non-essentials was another bright spot, growing 4.0 per cent. Pharmacy, health and beauty stores experienced growth of 5.9 per cent as consumers pursued healthier lifestyles at the start of the new year. Elsewhere, entertainment remained robust at 6.8 per cent growth, as a strong opening for box office-topping 1917  helped cinema spend climb 22.0 per cent. Spending at travel agents and airlines also increased 4.2 and 3.2 per cent respectively, as consumers looked ahead to their next holiday.

The chilly weather kept Brits indoors, with spending in restaurants falling for the third month in a row, by 3.5 per cent, while takeaway expenditure grew 11.4 per cent. In a trend seen for several months, clothing stores also continued to see a decline, with the sector decreasing 2.2 per cent. Electronics stores also contracted by 1.4 per cent.

Consumer confidence is on the rise, with four in ten (42 per cent) consumers upbeat about the country’s economic prospects, the most positive figures reported since September 2016. Three quarters (74 per cent) also feel confident about their household finances, the highest seen since February 2019.

Looking ahead, however, over half of UK adults (51 per cent) believe the pace of economic growth could decline in the next few months. Consumers are also thinking carefully about the most responsible way to spend their money. More than half (56 per cent) said they have become more conscious of their personal impact on the environment and consequently intend to change their behaviour. A third of shoppers (33 per cent) also plan to buy fewer plastic goods. A focus on maximising value continues to be evident, with spending at discount stores up 9.5 per cent in January.

Esme Harwood, Director at Barclaycard, said: “Consumer spending has had a boost in January, and we’ve also seen confidence in the economy grow. Brits are planning holidays and enjoying box office hits. Traditional retail continues to face challenges though. How retailers respond to consumer demand for value for money and responsible shopping will be key.”   

  Spend Growth Transaction Growth
     
Essential 3.7% 5.5%
Non Essential 4.0% 9.7%
     
OVERALL 3.9% 8.1%
Retail 2.8% 5.4%
Clothing -2.2% -3.2%
Grocery 4.0% 7.1%
Supermarkets 3.7% 5.9%
Food & Drink Specialist 7.4% 18.3%
Household -0.4% 2.8%
Home Improvements & DIY 0.7% 3.8%
Electronics -1.4% 2.1%
Furniture Stores -0.6% 2.7%
General Retailers 6.4% 5.2%
General Retailers & Catalogues 10.7% 4.0%
Department Stores -1.8% 4.5%
Discount Stores 9.5% 9.6%
Specialist Retailers 3.1% 5.6%
Pharmacy, Health & Beauty 5.9% 5.8%
Sports & Outdoor -1.0% -2.9%
Other Specialist Retailers 2.9% 7.4%
Hospitality & Leisure 5.7% 11.8%
Eating & Drinking 8.6% 11.9%
Restaurants -3.5% -5.0%
Bars, Pubs & Clubs 10.1% 19.4%
Takeaways and Fast Food 11.4% 10.5%
Other Food & Drink 10.5% 13.6%
Entertainment 6.8% 17.7%
Hotels, Resorts & Accomodation 4.0% 6.6%
Travel 3.9% 10.5%
Travel Agents 4.2% 3.0%
Airlines 3.2% -3.0%
Other Travel 4.1% 11.7%
Other 4.7% 11.6%
Digital Content & Subscription 8.5% 17.9%
Fuel 4.3% 4.8%
Motoring 5.9% 17.8%
Other Services 3.5% 10.8%
     
Online 5.1% 10.4%
F2F 3.1% 7.3%
     
  Spend Transaction
Online as % of Total 42.5% 26.2%

Notes to editors

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 23 December 2019 to 24 January 2020. It is compared with 23 December 2018 to 24 January 2019.

The consumer confidence survey in this press release was carried out between 24 and 27 January 2020 by Longitude Research on behalf of Barclaycard. There were 2,004 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.

*Gov.UK Weekly road fuel prices: https://www.gov.uk/government/statistical-data-sets/oil-and-petroleum-products-weekly-statistics#history

For more information, please contact Polly Ewell at polly.ewell@barclaycard.co.uk or on +44 (0) 203 5550824 or Julia Madden at julia.madden@barclays.com or on +44 (0) 207 116 9559.  

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 2018 we processed nearly £268bn 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.