Consumer spending up in August for the first time in six months
Consumer spending grew 0.2% in August, the first uplift since February, data from Barclaycard reveals.
Spending on essential items grew 5.1%, largely driven by supermarket shopping which was up 14.9%, data from Barclaycard – which sees nearly half of the nation’s debit and credit transactions – revealed.
It said the number of fuel transactions returned to similar levels seen last year and clothing spend increased for the first time since March 2019 as shoppers took advantage of end-of-season sales.
Spending at department stores also saw improvement, with the smallest drop (-3.6%) in the category since February 2020.
Brits enjoyed the last of summer and the eased lockdown measures as spending at pubs and bars saw a 9.3% growth in transactions. Again, Barclaycard noted this was the first uplift since lockdown was introduced.
Despite the return to the roads and the high street, Barclaycard said the months of lockdown have accelerated a sustained shift towards online shopping.
The highest increase was seen across supermarkets – a 102.7% year-on-year rise, followed by online clothing which grew 24.3%.
Takeaways and fast food saw their highest increase (20.7%) since Barclaycard started tracking the category in September 2019, while meal subscription services rose 65.8% as fresh, hassle-free dinner options became a mainstay in many households.
Meanwhile, hotels, resorts and accommodation saw their smallest decline since lockdown began, at -19.1% year-on-year; up from -30% recorded in the previous month as holidaymakers booked staycations during the school summer holidays.
But spend on airlines and travel agents dropped 61% compared to August 2019, as international travel restrictions and quarantine guidelines continued to impact the sector.
Barclaycard also tracks the nation’s confidence in the UK economy and reported that it has fallen to its lowest (19%) since it started the data series six years ago. But confidence in household finances remains steady at 68%. It said this can perhaps be attributed to the 45% who have saved money over lockdown.
‘Challenging times still lay ahead’
Raheel Ahmed, head of consumer products, said: “It’s encouraging to see the first uplift in spending after such a turbulent time for retailers. It seems the final throws of summer have spurred households to get out and about with clothing stores, pubs and bars welcoming growth for the first time since lockdown began.
“However, despite the high-street showing some signs of recovery, challenging times still lay ahead in certain sectors. Months of lockdown has helped accelerate the trend towards digital, with surges in areas such as online ordering of takeaways and buying groceries online, meaning the road to recovery may still be a long one for bricks-and-mortar stores.
“Retailers may take reassurance from the fact that household confidence remains steady, and of course, the restaurant sector also benefitted from the boost provided by the Eat Out To Help Out Scheme. As this discount comes to an end, and the lure of pub gardens slip away with the sunshine, we will see the resilience of businesses truly tested as we head into autumn.”