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Consumer spending growth dips to 3.3 per cent as challenges facing the high street remain in the run-up to Christmas

Mon Dec 03 19:01:00 EST 2018

  • Consumer spending grew 3.3 per cent year-on-year in November, dipping to the lowest level of growth since March 2018
  • The retail sector continued to face challenges with department store and clothing spending contracting by 7.1 and 2.9 per cent respectively
  • The Spice Girls reunion and Fantastic Beasts: The Crimes of Grindelwald helped ticket sales to climb 30.5 per cent
  • Yet, caution prevails, just 52 per cent of UK adults now say that they have confidence in their household finances – the lowest level Barclaycard has recorded since 2015

Consumer spending grew 3.3 per cent year-on-year in November, dipping to the lowest level of growth since March, when the ‘Beast from the East’ took its toll on the high street.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, shows that expenditure on essentials rose modestly by 4.0 per cent, bolstered by a rise in petrol spending of 8.9 per cent amidst ongoing high fuel prices.

The retail sector continued to face tough times, as it seems consumers held off spending ahead of the festive season and even the onset of the cold weather wasn’t enough to tempt shoppers to buy their winter wardrobes. Clothing spending contracted by 2.9 per cent, the biggest fall since October 2017. Similarly, department stores and electronic stores saw contractions of 7.1 per cent and 4.9 per cent respectively.

Entertainment, on the other hand, remained relatively strong at 8.7 per cent, with ticket sales soaring 30.5 per cent – the highest increase since November 2014 – as the Spice Girls reunion tour and Fantastic Beasts: The Crimes of Grindelwald helped to boost sales. Continuing the recent trend, spending was also up at pubs (11.3 per cent) and restaurants (8.3 per cent).

November’s subdued figures reflect a cautious mood amongst consumers. Just 52 per cent of UK adults now say that they have confidence in their household finances – the lowest level recorded since Barclaycard began tracking this data in 2015.

What’s more, non-essential expenditure also saw a drop last month to 2.9 per cent growth, the lowest level since March this year. This decrease is also reflected by just 40 per cent of Brits reporting they feel confident in their ability to spend on non-essential items.

To balance the household budget, 64 per cent of shoppers also say they are being careful to seek out value for money in the purchases they make.

While Black Friday was again a much-hyped retail event, just 16 per cent of consumers said they expect to spend less in December as a result of making Christmas purchases in the final week of November – indicating that many shoppers still plan to spend as usual during the festive period.

Esme Harwood, Director at Barclaycard, said: “November was a mixed month, with department store and clothing spending contracting but entertainment remaining strong. It seems shoppers are yet to make their main Christmas purchases for friends, family and loved ones – despite many retailers offering Black Friday discounts to try and boost sales.

“This may be unsurprising, given we’ve seen consumer confidence in household finances fall to a record low, likely influenced by ongoing political and economic uncertainty. As the final countdown to Christmas begins, it will be interesting to see whether shoppers will be enticed back to the high street over the next few weeks”.

 

Y/Y Spend growth by category

Overall

Clothing

-2.9%

     Family Clothing

-4.0%

     Shoe Shops

0.1%

     Women’s Clothing

-1.6%

     Men’s Clothing

-3.2%

Restaurants

8.3%

Auto Parts & Accessories

4.5%

Cinema, Theatre & Dance

30.5%

Public Houses

11.3%

Department Stores

-7.1%

DIY Stores

3.7%

Travel Agents

8.2%

Airlines

3.2%

Supermarkets

1.8%

Petrol

8.9%

Gambling

-4.2%

Vehicle Sales

-3.4%

Hotels

1.9%

Auto Repair Shops

1.7%

Sports Shops

-2.2%

Furniture Stores

3.6%

Telecoms

0.3%

Household Appliances

-14.0%

Jewellers

-5.2%

Sports and Games Establishment

5.3%

Garden Centres

2.0%

Discount Stores

-16.9%

Gift Shops

-4.9%

Floor Covering Stores

-2.5%

Tourist Attractions

0.9%

Amusment Parks

16.0%

Aquariums

27.2%

Electronic Stores

-4.9%

Cosmetic Stores

3.3%

Optical Goods

2.4%

Overall

3.3%

 

Average Transaction Value

Overall

-4.5%

Clothing

0.0%

Airlines

-7.7%

Restaurants

-3.9%

Supermarkets

-3.6%

Petrol

3.5%

 

Number of Transactions

Overall

8.3%

Clothing

-2.9%

Airlines

11.6%

Restaurants

12.7%

Supermarkets

5.6%

Petrol

5.3%


Notes to Editors

For more information please contact Rebecca Butler on +44 (0) 207 116 1993 or Rebecca.Butler@barclaycard.co.uk, or Phillipa Russell on +44 (0) 207 116 5473 or Phillipa.Russell@barclaycard.co.uk.

The monthly spend data in this release relates to the period 21 Oct to 17 Nov 2018. It is compared with 21 Oct to 17 Nov 2017.

The November consumer confidence data cited in this release are from YouGov Plc. Total sample size was 1,622 adults. Fieldwork was undertaken between 20 and 21 November 2018. An additional question relating to Black Friday spending was asked on 26 and 27 November, polling 1,737 respondents. The surveys were carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). Consumer survey findings going back to 2014 were carried out by Longitude Research on behalf of Barclaycard. There were at least 2,000 respondents in each survey, providing a representative sample of adult UK consumers by age, gender, region, income group, professional status and family situation.

*Online and In-store splits of Spend insights data are not currently available 

About Barclaycard

Barclaycard 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 2017 we processed over £250bn 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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