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Consumer spending rises modestly by 1.6 per cent in September as Brits remain cautious about the economic outlook

07 Oct 2019 07:15

  • Essential expenditure increased slightly, with supermarkets seeing only muted growth while fuel spend remained flat
  • At the same time, spending on entertainment and nights out rose in September, as Brits continued to prioritise experiences
  • Retail spend overall was subdued, with clothing down as consumers spent less than usual on their autumn wardrobes
  • The stockpiling trend continues, with one in eight already buying Christmas food and drink in case of shortages between now and the festive season

Consumer spending grew by a modest 1.6 per cent year-on-year in September with strong growth in entertainment and experiences propping up subdued retail sales.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, shows that essential spending grew just 1.1 per cent overall, with supermarket expenditure up 1.6 per cent and fuel expenditure showing no growth at all at 0.0 per cent.

Meanwhile, non-essential spending rose by 1.8 per cent year-on-year, as Brits continued to prioritise experiences. This included a 4.5 per cent increase in spending at restaurants, while takeaways were up 8.2 per cent, and bars, pubs and clubs saw growth of 12.9 per cent.

Entertainment, which includes cinema, sports and theatre tickets, grew by 4.7 per cent. Similarly, spending on digital content and subscriptions grew by 9.8 per cent, demonstrating the rising popularity of online services and streaming subscriptions.

In contrast, the retail sector continued to face challenges, with clothing contracting 3.9 per cent. A third of (34 per cent) consumers confirm they are spending less than normal on autumn clothes this year, which may be influenced by warm September weather. Likewise, household retailers, which include DIY, electronics and furniture stores, also struggled with a 1.2 per cent year-on-year decline.

Overall consumer confidence remained low in September, with just 29 per cent of UK adults feeling positive about the state of the UK economy. Two in five (41 per cent) feel actively pessimistic about their ability to spend money on discretionary items – five per cent more than in August. Moreover, half of Brits (51 per cent) say they are worried about the rising cost of everyday items impacting their buying power.

The trend towards stockpiling continues with 18 per cent of consumers buying essential items in case of future shortages – up one per cent from August. Topping the list of products being stockpiled are tinned goods (52 per cent), dried produce (45 per cent), household supplies such as toilet roll and cleaning products (40 per cent), and teabags and coffee (37 per cent). Additionally, one in eight Brits (12 per cent) has already started buying food and drink for Christmas in case of shortages between now and the start of the festive season.

Esme Harwood, Director at Barclaycard, said: “September’s figures demonstrate the continuing trend of spending on experiences rather than products, with Brits preferring to attend events, eat out or go to the pub with friends. We’re also seeing the impact of the subscription economy, with strong growth in digital services such as Netflix, Spotify and Amazon Prime.

“However, confidence remains low with consumers uncertain about the economic outlook. In the run up to Brexit, the stockpiling trend shows no sign of going away with cautious shoppers already looking ahead to Christmas and buying festive food and drink in case unexpected shortages hit the shelves in the months ahead.”

  Spend Growth Transaction Growth
     
Essential 1.1% 5.3%
Non Essential 1.8% 9.1%
     
OVERALL 1.6% 7.6%
Retail 1.2% 5.3%
Clothing -3.9% -2.9%
Grocery 2.0% 7.5%
     Supermarkets 1.6% 5.8%
     Food & Drink Specialist Stores 6.2% 22.0%
Household -1.2% 1.9%
     Home Improvements & DIY 0.5% 4.0%
     Electronic Stores -2.5% 0.7%
     Furniture Stores -3.1% -1.0%
General Retailers 5.5% 2.9%
     General Retailers and Catalogues 8.4% 0.3%
     Department Stores -3.1% 2.2%
     Discount Stores 8.2% 10.2%
Specialist Retailers 1.3% 5.7%
     Pharmacy, Health & Beauty 4.1% 4.7%
     Sports & Outdoor -3.0% -1.8%
     Other Specialist Retailers -0.1% 9.0%
Hospitality & Leisure 6.5% 13.3%
Eating & Drinking 9.9% 14.1%
     Restaurants 4.5% 10.1%
     Bars, Pubs & Clubs 12.9% 24.0%
     Takeaways and Fast Food 8.2% 7.2%
     Other Food & Drink 11.4% 16.2%
Entertainment 4.7% 8.9%
Hotels, Resorts & Accommodation 6.0% 12.9%
Travel 4.1% 12.6%
     Travel Agents 2.9% 1.5%
     Airlines 5.9% 1.0%
     Other Travel 4.3% 13.6%
Other -2.0% 6.7%
Digital Content & Subscriptions 9.8% 10.2%
Fuel 0.0% 3.4%
Motoring -0.6% 15.8%
     Vehicle Sales -3.2% 0.6%
     Other Motoring 2.6% 16.7%
Other Services -6.1% 2.3%
     
Online 3.6% 7.8%
F2F 0.3% 7.6%
     
  Spend Transaction
Online as % of Total 40.4% 23.4%

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. The monthly consumer spending data in this release relates to the period 18 August 2019 to 21 September 2019. It is compared with 19 August 2018 to 22 September 2018.

The consumer confidence survey used for this release was carried out between 20 and 23 September 2019 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.

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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