Brits loosen purse strings as restrictions ease
The easing of Covid restrictions has coincided with a loosening off people’s purse strings, according to Nationwide’s latest quarterly spending report.
The report shows that the amount spent on non-essential items, such as holidays, leisure, gardening, and eating out soared during the second quarter of the year.
According to Nationwide, more than £22bn was spent by Nationwide members during the second quarter of the year as inflation jumped to 2.5% in June. This is based on about 566 million transactions made by members between April and June – a 20% increase on the number of transactions made in the first three months of the year.
Spending continued to rise across the board during the second quarter of the year – essential household spend increasing by 13% compared to the first quarter of the year, while non-essential spend in Q2 grew by 60%.
Holidays and staycations
Holidays saw the biggest increase in the number of transactions, marking a 288% increase to 3.1 million compared to the first quarter of 2021. A total of £429.4m was spent on holidays in Q2 – up 141%.
Spending on UK campsites and caravan parks went up by 139% to £69.5m compared to the previous three months. The 500,000-plus transactions recorded make up around one in seven (16%) of all holiday transactions.
Gardening continued to bloom across the nation with Nationwide members spending £110.6m between April and June, an increase of 77% on the first quarter of the year. This is based on more than 2.8 million transactions in the second quarter, which represents a quarter-on-quarter increase of 103%.
Nationwide members were also looking for love with £3.8m spent on dating between April and June (up 5% quarter-on-quarter and 36% against the same period last year).
More than £269.4m was spent on leisure and recreation in the second quarter of the year – an increase of 108% on January to March. Sporting goods stores have particularly benefited as the year has gone on, with the number of transactions increasing 41% to 2.29 million compared to the first quarter of last year.
Eating and drinking
As restrictions have begun to ease, more people have started to eat and drink out once again, with the number of transactions between April and June (75.7 million) increasing 100% on the first quarter of this year. This equated to a total spend of £1.05bn in Q2 (a quarter-on quarter increase of 112%).
Mark Nalder, Nationwide’s head of payments, said: “As the country reopens, our latest quarterly spending report suggests that consumer spending is following suit as people loosen those purse strings and start to enjoy getting back out there. This yearning for a sense of normality, combined with a successful vaccination programme, is perhaps what is driving spend upwards – with a significant increase in holiday spend a prime example of this. The feeling of a brighter future is perhaps acting as a catalyst for wider increased spending, from charity donations to seeing friends again – all of which is keeping the tills ringing.
“Essential spending has also increased in most areas, although not by the same margin. We’re spending more on utilities as costs continue to rise, while travel and fuel spend has also risen as a result of getting out and about more. However, areas which were already high, such as supermarket spend, have remained broadly flat, with a rise in eating and drinking out potentially offsetting some of that expenditure.”