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Consumer spending up 5% as Brits make the most of the long hot summer

Mon Aug 06 19:01:00 EDT 2018

  • Consumer spending rose 5.0 per cent year-on-year in July, marking the third consecutive month of growth above 5 per cent
  • Essential spending climbed to 8.7 per cent growth, driven by a strong rise in supermarkets (6.7 per cent) and petrol (13 per cent)
  • Pub spending was boosted by the continued heatwave and World Cup matches – rising 73 per cent on the day of England’s semi-final
  • Despite consumers making the most of summer, looking ahead, one in three worry that higher interest rates will leave them financially worse off

Consumer spending rose 5.0 per cent year-on-year in July, marking the third consecutive month of growth surpassing 5 per cent and the strongest three-month period since Barclaycard began measuring this data in 2014.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, shows that essential spending climbed 8.7 per cent in July, driven by a strong rise in supermarkets of 6.7 per cent. Amidst some of the highest prices at the pump since 2014, petrol expenditure also grew significantly, up 13 per cent.

Consumers have been keen to take advantage of the sunshine while it lasts, with almost a quarter (23 per cent) saying the hot weather this summer has prompted them to spend more money than usual on experiences and outdoor activities. Of these, 56 per cent are prioritising spending on day trips, and one in two (50 per cent) are buying more food and drink than normal to enjoy barbecues and picnics with friends and family.

The long spell of warm weather has also been good news for women’s clothing, with spend increasing 4.5 per cent – the strongest rise since January 2016 – as shoppers updated their summer wardrobes. Garden centres also continued to enjoy the good growth seen throughout the summer so far, reaching 8.1 per cent.

Along with the heat, England’s performance in the World Cup was another factor that boosted pub spending by 16.8 per cent in July, the biggest increase since April last year. Overall, consumers spent 41 per cent more in pubs on England match days than on the equivalent days in 2017, rising to an impressive 73 per cent on the day of the England vs Croatia semi-final, compared with the same time last year.

However, despite a willingness to spend on summer treats while the good weather lasts, shoppers remain cautious about the broader economic picture with confidence in household finances dropping six percentage points from June to 59 per cent last month.

Rising interest rates are another area of concern for some, with one in three (34 per cent) saying they are worried that the Bank of England raising interest rates on 2 August means they will have less spending money each month.

Esme Harwood, Director at Barclaycard, said:

“The prolonged warm weather combined with England’s World Cup performance has created a short-term boost in spending. With the sunshine showing no sign of abating, spending levels have remained higher than we would normally expect with Brits keen to make the most of the heatwave  –  whether in the pub over a few drinks or stocking up at the supermarket to enjoy a barbecue.

“It will be interesting to see if this strong level of growth continues as we move into the final stretch of summer. It’s clear that some consumers remain cautious about what’s to come with interest rates rising and overall confidence in household finances down slightly from June.”

 

Y/Y Spend growth by category

Overall

Online

In-store

Clothing

3.6%

13.7%

-1.3%

     Family Clothing

4.5%

17.1%

-1.1%

     Shoe Shops

-3.6%

2.6%

-6.0%

     Women’s Clothing

4.5%

11.7%

0.4%

     Men’s Clothing

0.2%

3.8%

-1.8%

Restaurants

7.5%

3.3%

7.9%

Auto Parts & Accessories

2.9%

15.1%

-1.6%

Cinema, Theatre & Dance

-18.0%

-23.6%

-1.6%

Public Houses

16.8%

29.3%

16.7%

Department Stores

-3.8%

6.3%

-6.4%

DIY Stores

2.8%

7.7%

2.2%

Travel Agents

9.8%

11.7%

7.7%

Airlines

4.2%

3.7%

7.3%

Supermarkets

6.7%

10.8%

6.4%

Petrol

13.0%

95.8%

12.9%

Gambling

17.0%

21.6%

1.3%

Vehicle Sales

-3.3%

-6.1%

-3.3%

Hotels

3.6%

22.1%

-1.6%

Auto Repair Shops

3.0%

6.9%

2.8%

Sports Shops

0.5%

5.5%

-1.5%

Furniture Stores

-1.6%

28.5%

-7.8%

Telecoms

0.7%

7.4%

-4.5%

Household Appliances

-15.2%

-33.1%

-4.3%

Jewellers

-4.1%

6.9%

-5.9%

Sports and Games Establishment

-6.6%

-10.0%

-4.4%

Garden Centres

8.1%

13.6%

7.2%

Discount Stores

-11.0%

18.2%

-17.2%

Gift Shops

-6.4%

-16.6%

-3.5%

Floor Covering Stores

-5.4%

9.2%

-6.9%

Tourist Attractions

-2.3%

2.0%

-5.9%

Amusment Parks

8.4%

7.3%

9.0%

Aquariums

5.5%

53.0%

-6.2%

Electronic Stores

-9.4%

-5.7%

-11.4%

Cosmetic Stores

3.0%

6.7%

-0.6%

Optical Goods

4.7%

20.8%

3.6%

Overall

5.0%

10.4%

2.9%

 

Online share of spend

Clothing

35.9%

Travel Agents

58.0%

 

Average Transaction Value

Overall

-6.2%

Clothing

-3.0%

Airlines

-0.2%

Restaurants

-7.5%

Supermarkets

-4.4%

Petrol

2.6%

 

Number of Transactions

Overall

12.1%

Clothing

6.8%

Airlines

4.1%

Restaurants

16.2%

Supermarkets

11.5%

Petrol

10.1%


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)7387 238 195 or Phillipa.Russell@barclaycard.co.uk

The monthly spend data in this release relates to the period 24 June to 21 July 2018. It is compared with 24 June to 21 July 2017.

The 41 per cent rise in pub spending mentioned in this release is based on the average spend increase on 24th June 2018, 28th June 2018, 3rd July 2018, 7th July 2018 and 11th July 2018. These dates are compared with the equivalent days in 2017: 25th June 2017, 29th June 2017, 4th July 2017, 8th July 2017 and 12th July 2017.

The 73 per cent rise in pub spending relates to 11th July 2018 and compares it with 12 July 2017.

The July consumer confidence data cited in this release are from YouGov Plc. Total sample size was 1,627 adults. Fieldwork was undertaken between 23rd and 24th July 2018. The survey was 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 also 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.

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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