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Consumer spending up 4.5 per cent as Brits enjoy final stretch of summer

Mon Sep 03 19:01:00 EDT 2018

·       Consumer spending grew 4.5 per cent year-on-year in August, maintaining the strong level seen earlier in the summer

·       Essential spending rose 6.9 per cent, bolstered by rises in petrol (10.9 per cent) and supermarket expenditure (5.0 per cent)

·       Entertainment remained strong at 10.3 per cent, driven by ticket sales as well as pub spending

·       Looking ahead, a third of consumers (34 per cent) say they are now planning to reduce their spending after making the most of an unusually hot summer

Consumer spending rose 4.5 per cent year-on-year in August, maintaining the strong level seen in recent months as Brits struck a balance between covering the cost of essentials and enjoying the final stretch of summer.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, shows that essential spending performed well with 6.9 per cent year-on-year growth, bolstered by a rise in supermarket expenditure of 5.0 per cent. As fuel prices remained at their highest for several years, petrol spending climbed 10.9 per cent.

Non-essential expenditure, meanwhile, also demonstrated growth of 3.4 per cent, indicating that consumers are balancing their budgets to cover the necessities while allowing for some discretionary spending. The trend of spending on experiences continued with entertainment up 10.3 per cent, driven by growth in ticket sales (8.6 per cent) and pub spending (11.9 per cent).

However, not all categories enjoyed the same boost. As consumers put off buying new autumn and winter wardrobes due to a warm August, clothing expenditure reported just 0.6 per cent growth, with women’s and men’s clothing sales contracting slightly at -0.9 and -0.3 per cent respectively.

Garden centres also took a dip from previous months, rising just 0.5 per cent. This is in stark contrast to the double-digit growth in earlier months which saw Brits buy plants and tools to tidy up their outdoor areas, and make the most of the sunshine by enjoying barbeques with friends and family.

Having spent more than usual over summer, a third of consumers (34 per cent) say they are now planning to reduce their expenditure. Of these consumers, 44 per cent say they’ll do so by cutting back on treats for themselves, while 39 per cent say they’ll spend less on entertainment, such as going to restaurants or having nights out.

A degree of uncertainty about the future is also likely to be driving this caution. Nearly six in ten Brits (58 per cent) are worried that rising inflation will leave them with less money to spend each month, while a similar proportion (56 per cent) are concerned that rising energy prices will leave them worse off.

Esme Harwood, Director at Barclaycard, said:

“Brits have been feeling confident enough in their spending power to enjoy summer events and evenings out. However, it’s clear they’ve struck a balance between spending on essentials and treating themselves.

“Looking ahead, it appears that many consumers are planning to tighten their belts and keep a closer eye on their finances after spending more than usual over summer.”

 

 

Y/Y Spend growth by category

Overall

Online

In-store

Clothing

0.6%

12.2%

-4.7%

     Family Clothing

1.3%

14.8%

-4.7%

     Shoe Shops

-3.7%

4.5%

-6.3%

     Women’s Clothing

-0.9%

10.2%

-6.7%

     Men’s Clothing

-0.3%

1.6%

-1.3%

Restaurants

8.8%

-3.8%

9.8%

Auto Parts & Accessories

3.5%

12.9%

0.0%

Cinema, Theatre & Dance

8.6%

10.1%

5.6%

Public Houses

11.9%

19.5%

11.8%

Department Stores

-2.8%

8.9%

-5.7%

DIY Stores

-0.8%

2.5%

-1.3%

Travel Agents

11.0%

12.2%

9.7%

Airlines

7.5%

7.2%

9.9%

Supermarkets

5.0%

10.5%

4.6%

Petrol

10.9%

113.7%

10.9%

Gambling

24.2%

3.1%

295.6%

Vehicle Sales

-0.4%

2.1%

-0.5%

Hotels

4.6%

31.0%

-2.2%

Auto Repair Shops

3.5%

6.4%

3.4%

Sports Shops

-2.1%

3.4%

-4.2%

Furniture Stores

2.3%

36.3%

-4.2%

Telecoms

3.0%

9.4%

-2.0%

Household Appliances

-12.4%

-27.6%

-3.3%

Jewellers

-1.3%

14.9%

-3.8%

Sports and Games Establishment

2.6%

6.7%

0.4%

Garden Centres

0.5%

1.6%

0.3%

Discount Stores

-15.0%

15.2%

-21.1%

Gift Shops

-4.9%

-14.2%

-2.5%

Floor Covering Stores

-1.6%

15.5%

-3.3%

Tourist Attractions

-2.3%

6.4%

-8.2%

Amusment Parks

9.2%

11.1%

8.5%

Aquariums

22.1%

92.4%

3.4%

Electronic Stores

-2.9%

0.9%

-4.9%

Cosmetic Stores

3.1%

7.3%

-1.0%

Optical Goods

4.1%

14.9%

3.4%

Overall

4.5%

10.2%

2.8%

 

 

Online share of spend

Clothing

35.2%

Travel Agents

59.3%

 

– Ends –

 

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 22 July to 18 August 2018. It is compared with 22 July to 18 August 2017.

The August consumer confidence data cited in this release are from YouGov Plc. Total sample size was 1,697 adults. Fieldwork was undertaken between 20 and 21 August 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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