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Consumer spending growth drops to 1.2 per cent as ongoing uncertainty causes Brits to cut back

05 Mar 2019 00:01

  • Non-essential expenditure saw year-on-year growth of just 0.8 per cent as clothing, department store and hotel spending contracted
  • Even pubs and restaurants, traditionally strong categories, reported slower growth than recent months of just 7.4 and 3.9 per cent respectively
  • Half of UK adults worry that Brexit will have a negative impact on the UK economy and cause their personal finances to suffer
  • One in five has started stockpiling essential items in case of shortages in the near future

Consumer spending grew by 1.2 per cent year-on-year in February, equating to a decline in real terms when adjusting for inflation.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, shows that essential expenditure rose by 2.3 per cent, propped up by relatively modest growth in supermarkets of 2.5 per cent as petrol spending contracted by 1.2 per cent.

Non-essential spending, meanwhile, saw growth of just 0.8 per cent. Spending on clothing contracted by 5.2 per cent, while department stores saw another month of decline of 5.5 per cent.

After consecutive months of growth, hotel spending, saw a contraction of 3.8 per cent. Pubs and restaurants, traditionally both strong categories, were also not immune –reporting unusually low growth of 7.4 and 3.9 per cent respectively.

This drop in spending may be due to consumers re-evaluating their budgets. Almost one in three Britons (32 per cent) say they are cutting back on non-essential items (such as eating out or buying new clothes), or shopping more often at discount stores in order to make their money go further.

Ongoing economic uncertainty means many consumers continue to take a cautious approach to spending. Half of UK adults (50 per cent) worry that Brexit will have a negative impact on the UK economy and cause their personal finances to suffer. 53 per cent are also concerned that a rise in the cost of everyday items over the next month will impact their spending.

Furthermore, almost one in five Brits (18 per cent) have started stockpiling essential food items in case of shortages in the near future.

Esme Harwood, Director at Barclaycard, said:

“Uncertainty over Brexit appears to be driving a shift in behaviour, with many Brits worrying about price rises and cutting back on non-essential spend, and some even stockpiling everyday items.

“Discretionary expenditure has seen a considerable decline – spending at retailers continues to decrease, and even hotels, pubs and restaurants are feeling the impact of cut backs.”

 

Y/Y Spend growth by category

Overall

Clothing

-5.2%

     Family Clothing

-6.8%

     Shoe Shops

-4.1%

     Women’s Clothing

4.8%

     Men’s Clothing

-2.5%

Restaurants

3.9%

Auto Parts & Accessories

-1.2%

Cinema, Theatre & Dance

-16.0%

Public Houses

7.4%

Department Stores

-5.5%

DIY Stores

1.5%

Travel Agents

-3.0%

Airlines

-1.0%

Supermarkets

2.5%

Petrol

-1.2%

Gambling

-6.9%

Vehicle Sales

-5.7%

Hotels

-3.8%

Auto Repair Shops

-3.9%

Sports Shops

-3.3%

Furniture Stores

2.8%

Telecoms

1.7%

Household Appliances

-6.3%

Jewellers

-0.3%

Sports and Games Establishment

0.5%

Garden Centres

0.2%

Discount Stores

-11.4%

Gift Shops

-4.0%

Floor Covering Stores

-1.4%

Tourist Attractions

-23.0%

Amusment Parks

-14.2%

Aquariums

-10.0%

Electronic Stores

-2.4%

Cosmetic Stores

3.5%

Optical Goods

4.4%

Overall

1.2%

 

Average Transaction Value

Overall

-5.7%

Clothing

-1.3%

Airlines

-3.2%

Restaurants

-5.1%

Supermarkets

-3.4%

Petrol

-2.2%

 

Number of Transactions

Overall

7.3%

Clothing

-3.9%

Airlines

2.2%

Restaurants

9.5%

Supermarkets

6.1%

Petrol

1.0%


Notes to editors

For more information please contact Phillipa Russell +44 (0) 207 116 5473 phillipa.russell@barclaycard.co.uk or Rebecca Butler on +44 (0) 207 116 1993 rebecca.butler@barclaycard.co.uk

The monthly spend data in this release relates to the period 20 Jan 2019 – 16 Feb 2019. It is compared with 20 Jan 2018 – 16 Feb 2018.

The consumer confidence survey used for this release was carried out between 19 and 21 February 2019 by Longitude Research on behalf of Barclaycard. There were 2,008 respondents, providing a representative sample of UK consumers by age, gender, region, income group, professional status and family situation.

About Barclaycard

Barclaycard, part of Barclays Bank PLC, 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 2018 we processed nearly £268bn 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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