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Consumer spending returns to modest growth but no relief for retail, despite the January sales

Mon Feb 04 19:01:00 EST 2019

  • Consumer spending grew 2.9 per cent year-on-year in January as spending on essentials rebounded
  • Supermarket spending climbed 6.8 per cent, the highest growth since April 2017
  • Retailers continued to struggle, with clothing and department store expenditure in fourth month of consecutive decline
  • Over half of UK adults say the January sales are less important to them than they were two or three years ago

Consumer spending grew 2.9 per cent year-on-year in January, returning to modest growth following a slower December.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, shows that essential spending climbed to 6.4 per cent, the highest level for five months.

Fuelling this was a strong performance from supermarkets, which saw their highest growth since April 2017 at 6.8 per cent.

Non-essential expenditure, on the other hand, saw an increase of just 1.7 per cent. Even the January sales were not enough to bring relief to retailers, as clothing and department stores experienced their fourth month of consecutive decline, contracting by 0.9 per cent and 0.6 per cent respectively.

One of the reasons for this could be a change in sale shopping habits. Over half of UK adults (52 per cent) say the January sales are less important to them than they were two or three years ago and one in four (24 per cent) say they are losing interest because retailers now offer discounts throughout the year.  

Consumers continue to remain cautious about their expenditure, with seven in ten (70 per cent) saying they have become much more careful to seek out value for money in the purchases they make.

Furthermore, over half (54 per cent) of consumers say they are worried that a rise in the price of everyday items will impact their spending power in the near future.

Looking at the wider picture, amidst ongoing political uncertainty, consumer confidence in the UK economy has dropped to 30 per cent.

Esme Harwood, Director at Barclaycard, said:

“Despite a modest uplift in overall consumer spending, retailers continued to struggle as the traditional January sales period wasn’t enough to entice shoppers to spend.

“Looking forward, consumers will continue to prioritise value for money, especially as many have concerns about potential price increases on everyday essentials.”

 

Y/Y Spend growth by category

Overall

Clothing

-0.9%

     Family Clothing

-1.0%

     Shoe Shops

-0.5%

     Women’s Clothing

-0.9%

     Men’s Clothing

-2.7%

Restaurants

11.0%

Auto Parts & Accessories

1.1%

Cinema, Theatre & Dance

-6.4%

Public Houses

15.0%

Department Stores

-0.6%

DIY Stores

1.1%

Travel Agents

-2.7%

Airlines

-2.0%

Supermarkets

6.8%

Petrol

1.7%

Gambling

1.5%

Vehicle Sales

-7.8%

Hotels

1.6%

Auto Repair Shops

-5.5%

Sports Shops

4.8%

Furniture Stores

0.4%

Telecoms

0.5%

Household Appliances

-14.5%

Jewellers

5.9%

Sports and Games Establishment

3.9%

Garden Centres

14.7%

Discount Stores

-5.0%

Gift Shops

8.9%

Floor Covering Stores

-5.1%

Tourist Attractions

-0.7%

Amusment Parks

15.4%

Aquariums

34.5%

Electronic Stores

-3.5%

Cosmetic Stores

10.3%

Optical Goods

-0.2%

Overall

2.9%



Average Transaction Value

Overall

-5.9%

Clothing

-1.6%

Airlines

-4.2%

Restaurants

-2.3%

Supermarkets

-1.3%

Petrol

-0.9%



Number of Transactions

Overall

9.4%

Clothing

0.7%

Airlines

2.2%

Restaurants

13.6%

Supermarkets

8.1%

Petrol

2.7%



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

Notes to editors

The monthly spend data in this release relates to the period 23 Dec 2018 – 19 Jan 2019. It is compared with 23 Dec 2017 – 19 Jan 2018.

The consumer confidence survey used for this release was carried out between 17 and 21 January 2019 by Longitude Research on behalf of Barclaycard. There were 2,020 respondents, providing a representative sample of 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, 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 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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