Consumer spending grew 2% year-on-year in September with food sales, home improvements and return-to-school shopping contributing to the largest uplift since February 2020.

Barclaycard analysed hundreds of millions of debit and credit card transactions alongside consumer research to provide an in-depth monthly view of UK spending.

It found that spending on essential items grew 6.1% year-on-year in September, with a 15.4% rise in supermarket expenditure.

Barclaycard found that more than a quarter (27%) of Brits admitted to stockpiling items such as tinned food and toilet roll in case of shortages in the future.

Spending on non-essentials

Spending on non-essential items grew 0.6%, the first rise since February, with strong increases in home improvement and DIY (25.7%) and furniture (28%).

The desire to decorate comes as 30% of Brits say they are spending more on home improvements than usual in case new lockdown restrictions lead to more time inside.

Clothing spend saw an improvement of 4.2% growth, as shoppers invested in autumn and winter wardrobes and parents prepared their children for a return to school.

Barclaycard says 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.

Holidays and hospitality

While overall travel declined 63.1%, 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% from last year, though this shows a significant improvement compared to May (-89.8%) and reflects similar levels seen in August (-19.1%).

Some positive signs of recovery were also seen by the hospitality sector. Spending at bars and pubs saw a 9% rise – the first increase since February – as pub-goers felt less cautious visiting their local now (44%) compared to August (50%).

Restaurant spend declined 18.7% year-on-year. However, this was a marked improvement on the 39.1% decrease seen in August.

However, more people were choosing to eat at home with spending on takeaways and fast food seeing the highest increase ever (25.8%).

Looking ahead

Barclaycard found that the nation is the most optimistic it has felt about the UK economy since March (24%) – an improvement on the 19% seen in August – while confidence in household finances remains high at 70%.

However, more than a third (34%) of people expect coronavirus or other economic changes to have a direct impact on their income over the next 12 months.

Raheel Ahmed, head of consumer products at Barclaycard, says: “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.”