• Spending on essential items grew 12.0 percent, largely driven by rising fuel prices
  • Brits cut back on the weekly grocery shop amid increasing inflation, with supermarket shopping seeing its lowest uplift since February 2020 
  • The travel sector, while still in decline, had its best month since before the pandemic, as a third of consumers report making holiday plans a priority
  • Despite concerns around rising living costs, nearly one in four Brits plans to spend more on experiences to make great memories
  • The Barclaycard report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending

Consumer card spending grew 13.7 percent in February compared to the same period in 2020 – the highest growth since November 2021 – as the lifting of Plan B restrictions and work-from-home guidance encouraged Brits to socialise, shop, and make travel plans as the economy re-opened.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items rose 12.0 percent in February. This increase was largely driven by an 11.2 percent rise in spend on fuel, likely due to climbing prices at the pump, as well as the easing of work-from-home guidance encouraging more Brits to commute.

While supermarket shopping grew 12.9 percent, this was the smallest uplift in the category since February 2020, as rising living costs continued to take effect. This has also led 59 percent of Brits to seek greater value for money to help reduce the cost of their weekly shop. Almost half of these shoppers (45 percent) are buying budget or own-brand goods over branded goods in supermarkets, while nearly two fifths (39 percent) are using vouchers or loyalty points to obtain discounts.

Spending on non-essential items, however, saw strong growth (14.5 percent) – the sharpest increase since November 2021 (18.3 percent) – as Brits spent more on discretionary items, holidays and experiences following the easing of restrictions.

The return to offices and increased socialising, combined with pent-up demand, encouraged Brits to invest more in their wardrobes and appearances in February. Clothing saw a sizeable uplift of 15.0 percent and department stores returned to growth (2.1 percent) after two months of decline in January (-6.1 percent) and December (-7.1 percent). Pharmacy, health and beauty stores rose 13.9 percent – slightly higher than in January (12.8 percent).

This comes as over two fifths (41 percent) say they are still purchasing small luxuries and treats to give themselves a boost despite rising inflation and energy prices, with almost a quarter (23 percent) of these consumers buying new clothing and accessories. Nearly one in five (18 percent) is spending on beauty products such as luxury face moisturisers and bath salts, with this figure rising to over a quarter (26 percent) for women.

The travel sector, though still in decline (-13.9 percent), had its best month since before the pandemic, as a third of Brits (33 percent) say they are making more social or holiday plans for the rest of the year as restrictions ease.

Spending on hotels, resorts and accommodation grew 7.4 percent, while airlines saw significant improvement, declining just -10.9 percent compared to -42.3 per cent in January. Travel agents are also seeing a recovery, falling -15.0 percent compared to -41.7 percent last month. Staycations continue to be a popular choice for holidaymakers, with over two fifths of consumers (42 percent) who are spending more on social or holiday plans prioritising spending on holidays in the UK.

As couples celebrated Valentine’s Day and friends enjoyed nights out, restaurants (-10.6 percent) saw a noticeable improvement compared to January (-17.5 percent), while bars, pubs and clubs grew 28.7 percent – more than double last month’s growth (14.9 percent).

The entertainment sector also enjoyed a 3.2 percent uplift, as families kept their children occupied during the half term break, enjoying days out and trips to the cinema to see films such as ‘Sing 2’ and ‘Belfast’.

However, not everyone braved the cold weather; storms Eunice and Franklin meant at-home experiences – or “insperiences”* – continued to prove popular, with spending on digital content and subscriptions as well as takeaways rising 37.4 percent and 61.0 percent respectively.

Consumers are feeling slightly less optimistic about their household finances (63 percent) compared to January (68 percent), as rising living costs continue to hamper confidence. While the true impact of this decline is yet to be seen in spending levels, inflation, rising food prices and energy bills are the main sources of concern for nine in 10 Brits (89 percent). Nearly half (46 percent) also expect that inflation will affect their household budgeting in 2022.

Despite these challenges, there are positive signs for the experience economy, as nearly one in four (23 percent) consumers say they will spend more on experiences to create great memories and less money on physical items – a figure that rises to almost four in 10 (37 percent) for 18–34-year-olds.

José Carvalho, Head of Consumer Products at Barclaycard, said: “The strong uplifts across both retail and hospitality show that the nation is keen to make the most of life following the easing of Plan B restrictions, with many Brits still purchasing treats to give themselves a boost, and making social and holiday plans for the year ahead.

“As inflation starts to have an impact on consumer confidence, we’re seeing a shift in spending habits as Brits seek more value from their purchases, particularly on supermarket shopping, which saw its smallest growth since February 2020. With energy prices rising at the start of April, we will be watching how these price-conscious behaviours evolve over the coming months.”

October 2022 issue

2022 A1 Buyers Guide

Buyers Guide 2022