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Consumer spending surges in September as warm weather and ‘back to school’ shopping contributes to 2 per cent growth

12 Oct 2020 19:01

  • Spending on essential items rose 6.1 per cent, bolstered by supermarket shopping, as a quarter of Brits admit to stockpiling goods in case of shortages
  • Clothing spend saw an uplift of 4.2 per cent, a significant improvement on last month’s 0.3 per cent growth
  • Bars and pubs increased 9.0 per cent, with punters saying they now feel more confident visiting their local
  • The Barclaycard report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending

Consumer spending grew 2.0 per cent year-on-year in September with food sales, home improvements and return-to-school shopping contributing to the largest uplift since February 2020.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew 6.1 per cent year-on-year, with a 15.4 per cent rise in supermarket expenditure. This comes as over a quarter (27 per cent) of Brits admit to stockpiling items such as tinned food and toilet roll in case of shortages in the near future.

Spending on non-essential items grew 0.6 per cent, the first rise since February, with strong increases in home improvement & DIY (25.7 per cent) and furniture (28.0 per cent) as the nation spruced up its homes ahead of the winter months. The desire to decorate comes as 30 per cent of Brits say they are spending more on home improvements than usual in case new lockdown restrictions lead to more time inside.

Looking at the high-street, face-to-face spending was down just 1.9 per cent – a notable improvement on August (-6.7 per cent) – suggesting Brits are becoming more comfortable visiting shops. Clothing spend saw a substantial improvement of 4.2 per cent growth, as shoppers invested in autumn/winter wardrobes and parents prepared their children for a return to school. This is a significant improvement on last month’s clothing figure of 0.3%, which was the first growth in the industry since March 2019.

While overall travel declined 63.1 per cent, there were signs that holidaymakers made the most of the warm September weather by choosing staycations over foreign travel. Spending at hotels, resorts and accommodation was down 18.1 per cent, though this shows a significant improvement compared to May (-89.8% per cent) and reflects similar levels seen in August (-19.1 per cent).

Some positive signs of recovery were also seen by the hospitality sector. Spending at bars and pubs* saw a 9.0 per cent rise – the first increase since February – as pub-goers admit to feeling less cautious visiting their local now (44 per cent) compared to August (50 per cent).

Despite restaurant spend declining 18.7 per cent year-on-year, this is a marked improvement on the 39.1 per cent decrease seen in the previous month, indicating that diners continued to take advantage of a range of extended discounts following the official ‘Eat Out to Help Out’ initiative ending in August**. However, despite this popularity, spending on takeaways and fast food saw the highest increase ever (25.8 per cent) as eating at home remained a very popular option.

The nation is also the most optimistic it has felt about the UK economy since March (24 per cent) – an improvement on the 19 per cent seen in August – while confidence in household finances remains high at 70 per cent. Although, this is tempered by over a third (34 per cent) expecting coronavirus or other economic changes to have a direct impact on their income over the next 12 months.

Raheel Ahmed, Head of Consumer Products, said: “Consumers clearly made the most of the sunshine by socialising in September, with spending at pubs and bars seeing the first increase since before the national lockdown was introduced in March. There were also signs that many Brits squeezed in a last-minute summer holiday in the UK, as spending on accommodation stayed at similar levels seen in August.

“However, we also saw households preparing to spend more time inside as winter draws closer, with home improvement increasing as a result. While the nation’s confidence in the UK economy has improved slightly, many are still cautious about the upcoming winter months, and the subsequent uncertainty it may bring has caused some to start stockpiling once more.”

  Spend Growth Transaction Growth
     
Essential 6.1% -4.6%
Non Essential 0.6% 9.9%
     
OVERALL 2.0% 4.5%
Retail 19.6% 8.8%
Clothing 4.2% 0.7%
Grocery 18.7% 2.8%
Supermarkets 15.4% -1.5%
Food & Drink Specialist 53.2% 36.2%
Household 22.6% 21.0%
Home Improvements & DIY 25.7% 29.6%
Electronics 14.5% 14.3%
Furniture Stores 28.0% 13.4%
General Retailers 30.1% 27.4%
General Retailers & Catalogues 44.2% 48.7%
Department Stores -0.2% -8.8%
Discount Stores 31.7% 13.3%
Specialist Retailers 16.0% 5.7%
Pharmacy, Health & Beauty 9.4% 0.2%
Sports & Outdoor 30.2% 14.5%
Other Specialist Retailers 14.8% 8.6%
Hospitality & Leisure -28.3% -7.5%
Eating & Drinking 12.1% 4.2%
Restaurants -18.7% -28.0%
Bars, Pubs & Clubs 9.0% 11.3%
Takeaways and Fast Food 25.8% 6.9%
Other Food & Drink 14.8% 4.7%
Entertainment -36.4% -19.3%
Hotels, Resorts & Accomodation -18.9% -12.2%
Travel -63.1% -32.4%
Travel Agents -73.3% -58.8%
Airlines -70.9% -61.7%
Other Travel -46.5% -29.9%
Other -4.5% 10.1%
Digital Content & Subscription 24.2% 35.4%
Fuel -11.3% -2.1%
Motoring 6.9% 0.1%
Other Services -11.8% 4.7%
     
Online 7.7% 32.1%
F2F -1.9% -4.1%


Notes to editors

In the coming months, the Consumer Spending release will be based on a slightly adjusted dataset, following the launch of UK Spend Trends 2.0. The new offering builds on Barclaycard’s strong history of publishing insights about UK consumer spending, and provides an in-depth view into consumer spending across more than 250 industries, customer age demographics as well as online and in-store purchases.

*This category includes pubs, bars, and clubs, with clubs making up less than 2% of the overall figure.

**Month-on-month restaurant spending data for September is compared against August when discounts given out by businesses during the ‘Eat Out to Help Out’ scheme were refunded by the Government.

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 22nd August 2020 to 25th September 2020. It is compared with 24th August 2019 to 27th September 2019.

The consumer confidence survey in this press release was carried out between 25th September and 28th September 2020 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.

For more information, please contact please contact Polly Ewell at polly.ewell@barclaycard.co.uk or on +44 (0)7882 088 493.

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. In the UK we process nearly £1 in every £3 spent using credit and debit cards, and in 2019 we processed over £272bn in transactions globally. 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.