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Consumer spending grows just 1.0 per cent in December as rise in consumer confidence fails to boost festive spending

Wed Jan 08 19:01:00 EST 2020

  • Supermarkets saw a downturn of 0.9 per cent, while specialist retailers – such as toys and gaming stores – decreased 4.0 per cent
  • However, cinema sales increased by 19 per cent as Star Wars and Frozen II drew in crowds – while spend in pubs (11.7 per cent) and takeaways (12.5 per cent) rose over the festive period
  • Consumer confidence in the UK economy reached the highest in all of 2019
  • The Barclaycard report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending

Consumer spending reached just 1.0 per cent year-on-year growth in December, representing a decline in real terms when accounting for inflation.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essentials declined 0.9 per cent in December, with supermarkets contracting by 0.9 per cent compared with December 2018. Petrol expenditure also fell by 0.5 per cent.

Many retailers also continued to see contractions in year-on-year spending: clothing spend was down 3.3 per cent, while specialist retailers such as toys and computer game stores saw a decline of 4.0 per cent.

However, on a more positive note spending on non-essentials grew 1.8 per cent year-on-year. Partly driving this growth was eating and drinking, which increased by 9.7 per cent as Brits enjoyed themselves during the festive period. However, the nation prioritised going to the pub (11.7 per cent) and takeaways (12.5 per cent) over eating out, as restaurants saw a 2.6 per cent decline.

Entertainment was also a bright spot, increasing by 5.5 per cent – bolstered by a rise in cinema sales of 19.0 per cent as crowds flocked to watch Star Wars: The Rise of Skywalker and Frozen II – both in the top four performing films of 2019. Digital content and subscriptions services also continue to enjoy strong growth, rising 14.7 per cent.

Following the General Election consumers showed renewed confidence in the UK economy, with four in 10 (41 per cent) indicating they were feeling upbeat – up 10 percentage points on November and the highest level throughout all of 2019.

UK consumers also remain upbeat about their household finances, with 70 per cent feeling confident. For those who are more assured in their personal finances than normal, the primary reason is greater certainty around Brexit (33 per cent) and UK politics (30 per cent).

Despite this, just one in five (21 per cent) consumers plan to buy a big-ticket item (such as a new vehicle or furniture) during 2020. Consumers’ reluctance to make any major purchases is reflected in the fact that, if given an additional £100, half of Britons (49 per cent) would put the money aside, into either savings or to pay off debt.

Esme Harwood, Director at Barclaycard, said: “Consumer confidence is finally improving after a long period of political uncertainty. This optimism hasn’t yet translated into high street sales, but spending on experiences continues to grow, with Brits enjoying box office hits and trips to the pub. While consumers remain reluctant to spend on big ticket items, the mood seems to be changing”.

  Spend Growth Transaction Growth
Essential -0.9% 2.8%
Non Essential 1.8% 5.8%
     
OVERALL 1.0% 4.8%
Retail -0.1% 1.2%
Clothing -3.3% -5.7%
Grocery -0.7% 4.4%
Supermarkets -0.9% 3.1%
Food & Drink Specialist 1.6% 14.2%
Household -2.7% -1.9%
Home Improvements & DIY -3.8% 1.0%
Electronics -3.9% -6.0%
Furniture Stores 1.8% 1.7%
General Retailers 5.2% -0.6%
General Retailers & Catalogues 10.7% -2.2%
Department Stores -4.8% -1.3%
Discount Stores 4.9% 5.7%
Specialist Retailers -1.8% -0.6%
Pharmacy, Health & Beauty 0.3% 1.2%
Sports & Outdoor 0.3% -3.5%
Other Specialist Retailers -4.0% -1.6%
Hospitality & Leisure 5.5% 11.1%
Eating & Drinking 9.7% 11.2%
Restaurants -2.6% -5.1%
Bars, Pubs & Clubs 11.7% 19.9%
Takeaways and Fast Food 12.5% 9.0%
Other Food & Drink 11.3% 12.9%
Entertainment 5.5% 15.8%
Hotels, Resorts & Accomodation 2.3% 8.3%
Travel 2.1% 10.0%
Travel Agents 1.1% 2.5%
Airlines 1.5% -3.7%
Other Travel 3.2% 10.7%
Other 0.5% 8.9%
Digital Content & Subscription 14.7% 21.9%
Fuel -0.5% 2.4%
Motoring -2.2% 8.2%
Other Services -0.2% 5.0%
     
Online 4.2% 5.9%
F2F -1.0% 4.4%
     
  Spend Transaction
Online as % of Total 40.3% 26.3%


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 19 November 2019 to 22 December 2019. It is compared with 19 November 2018 to 22 December 2018.

The consumer confidence survey in this press release was carried out between 17 and 19 December 2019 by Longitude Research on behalf of Barclaycard. There were 2,000 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.

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@barclaycard.co.uk 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 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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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.