Consumer spending rebounds as Brits enjoy freedom
The entertainment sector saw growth for the first time since the pandemic began, with spending up 8.1 per cent as people headed back to theatres, cinemas and sporting events, according to data from Barclaycard.
Pubs, bars and clubs had another strong month, recording 30.5 per cent growth compared to July 2019, as Brits socialised in beer gardens and returned to nightclubs.
Fuel spend also saw its first uplift since the onset of the Covid crisis, up 4.1 per cent year-on-year.
Brits hosting get-togethers to celebrate sporting events and social occasions meant spending on essential items grew 14 per cent.
Spending on non-essential items also recorded its highest growth since before the first UK lockdown, rising 10.4 per cent.
One in four (25 per cent) consumers say they have been dipping into their savings to make the most of post-lockdown life – a figure that rises to 39 per cent among 18–34-year-olds.
Meanwhile, the travel sector continued to face challenges, but figures indicate that overseas bookings are increasing, as spending on airlines (-56.2 per cent) and travel agents (-66.6 per cent) showed less of a decline than in June (-70.9 per cent and -75.3 per cent respectively).
Spending on hotels, resorts and accommodation in UK rose 7.8 per cent – its highest growth since before the first coronavirus lockdown.
However, there are signs the initial pent-up demand from lockdown is cooling off in certain sectors, Barclaycard said.
Restaurant spending, for example, had been improving steadily since restrictions began to ease in March, closing the gap on 2019, but last month there was a dip.
In contrast, takeaways saw record growth of 72.3 per cent – the highest since before the onset of the pandemic – as friends and families watched events such as the Euros and Wimbledon at home.
Face-to-face retail (excluding grocery) also saw a drop in demand last month, following a post-lockdown boom, as spending slipped back into decline (-0.2 per cent). At the same time, online retail (excluding grocery) continued to perform well, growing 47.4 per cent.
Raheel Ahmed, head of consumer products at Barclaycard, said: “July’s major sports fixtures and the heatwave kept the nation in good spirits, providing more reasons to celebrate together, and giving the entertainment industry its long-awaited boost back into growth.
“While some sectors took a small step back as the post-lockdown ‘honeymoon’ period cooled, July was a positive month overall. However, with inflation expected to rise, it will be interesting to see how this impacts consumer spending behaviour over the coming months.”