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Consumer spending grows by just 1.5 per cent in October as Brits stay in amidst bleak autumn weather

04 Nov 2019 19:01

  • Essential expenditure rose slightly, with supermarkets seeing low growth while fuel spend declined
  • Wet and cooler days influenced spending behaviour, with Brits choosing takeaways over eating out, while entertainment took a hit and clothing also declined
  • Confidence in the economy remains low, as consumers keep a close eye on budgeting alongside many expecting to spend less this Christmas
  • The stockpiling trend continues, with tinned good and toilet rolls topping the list

Consumer spending grew by just 1.5 per cent in October, narrowly falling behind the current rate of inflation, as Brits remained cautious with their spending.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, shows that essential spending grew slightly by 0.2 per cent, bolstered by a 1.5 per cent increase in supermarket expenditure.

However, essential spending was also impacted by a marked fall in fuel, which contracted by 3.9 per cent year-on-year. This drop is a result of the record high petrol prices in October 2018*, with our data showing the number of transactions has remained relatively stable.

Non-essential expenditure saw slightly stronger growth of 2.0 per cent, yet the wet autumnal weather took its toll as over a fifth (22 per cent) of consumers reported spending less than usual on leisure activities and evenings out. This impacted entertainment, which includes concert and theatre tickets, with the category declining by 3.0 per cent. Clothing also dipped 0.3 per cent in a sign of the ongoing challenges faced by retailers.

In contrast, fast food and takeaways benefited from 6.9 per cent year-on-year growth. Although pubs and clubs did see an increase of 5.5 per cent in October, this was down from 12.9 per cent in September, reinforcing the wider data indicating that Brits opted to stay at home instead of go out.    

It seems that UK adults are making a habit of carefully balancing their budgets as spending at discount stores grew by 7.7 per cent, with 61 per cent saying they are seeking value for money from their purchases.

This is perhaps why seven in ten (69 per cent) feel confident in their household finances and in their ability to live within their means each month (74 per cent). Yet retailers could be in for a challenging Christmas as less than half of Brits (47 per cent) are confident that they will be able to spend as much as they normally do on festivities.

In parallel, overall consumer confidence remained low in October. Just three in ten (31 per cent) Brits feel positive about the state of the UK economy, with the figure rising slightly to 37 per cent of over 55s but dropping to a low of 25 per cent among 34-54 year olds.

The trend towards stockpiling continues, with 17 per cent buying everyday items in case of potential shortages. Tinned goods top of the list, though household supplies – such as toilet roll – are becoming more popular to keep in reserve as 51 per cent are now stocking up on bathroom and cleaning supplies, compared to 40 per cent in September.

Esme Harwood, Director at Barclaycard, said: “Ongoing economic uncertainty combined with a bleak start to autumn led many Brits to stay in rather than spend out last month, choosing takeaways and evenings at home over socialising at bars or restaurants.

“As we head into the festive period, shoppers are also feeling cautious about their finances with many expecting to spend less than normal this Christmas. It’s likely we’ll see consumers continue to seek out value – whether that’s through buying more in discount stores or snapping up bargains in the Black Friday sales.”

  Spend Growth Transaction Growth
     
Essential 0.2% 3.0%
Non Essential 2.0% 7.9%
     
OVERALL 1.5% 6.0%
Retail 1.8% 3.7%
Clothing -0.3% -0.9%
Grocery 1.7% 5.1%
     Supermarkets 1.5% 3.7%
     Food & Drink Specialist Stores 3.8% 16.8%
Household -0.6% 1.1%
     Home Improvements & DIY -3.2% -0.5%
     Electronic Stores 1.7% 1.5%
     Furniture Stores 1.5% 4.8%
General Retailers 5.6% 1.4%
     General Retailers and Catalogues 7.4% -1.0%
     Department Stores 0.1% 1.1%
     Discount Stores 7.7% 8.0%
Specialist Retailers 2.6% 4.8%
     Pharmacy, Health & Beauty 3.2% 2.9%
     Sports & Outdoor 2.6% 1.5%
     Other Specialist Retailers 1.9% 7.9%
Hospitality & Leisure 5.4% 9.4%
Eating & Drinking 6.3% 8.8%
     Restaurants 4.2% 8.3%
     Bars, Pubs & Clubs 5.5% 13.9%
     Takeaways and Fast Food 6.9% 4.0%
     Other Food & Drink 7.0% 10.6%
Entertainment -3.0% 9.6%
Hotels, Resorts & Accommodation 3.1% 6.1%
Travel 7.4% 11.3%
     Travel Agents 11.4% 4.2%
     Airlines 6.3% -3.2%
     Other Travel 4.1% 12.3%
Other -2.5% 8.2%
Digital Content & Subscriptions 8.3% 21.7%
Fuel -3.9% -0.4%
Motoring -1.3% 13.6%
Other Services -4.3% 3.8%
     
Online 4.9% 9.9%
F2F -0.8% 4.7%
     
  Spend Transaction
Online as % of Total 42.1% 25.1%

Notes to editors

For more information please contact Phillipa Russell at Phillipa.Russell@barclaycard.co.uk or on + 44 (0) 207 116 5473, or Julia Madden at Julia.Madden@barclaycard.co.uk or on + 44 (0) 207 116 9559.  

The monthly consumer spending data in this release relates to the period 22 September 2019 to 20 October 2019. It is compared with 23 September 2018 to 21 October 2018.

The consumer confidence survey used for this release was carried out between 18 and 21 October 2019 by Longitude Research on behalf of Barclaycard. There were 2,003 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.

*AA Fuel Price Report: https://www.theaa.com/about-us/newsroom/aa-fuel-price-update-october-2018

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 and point-of-sale finance. In 2018 we processed nearly £268bn in transactions globally. Barclaycard is a pioneer of new forms of payment and is at the forefront of developing viable contactless and mobile payment schemes for today and cutting-edge forms of payment for the future. 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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