Consumer card spending grew 17.7 per cent in March as rising prices dampened confidence

  • Spending on essential items grew 18.1 per cent, largely driven by increasing fuel and food prices
  • Shoppers are buying in bulk to save money, with many stocking up on non-perishable items and household supplies
  • Nine in 10 consumers are concerned about the negative impact of rising household bills on their personal finances
  • Yet, the warm weather in early March and a potential Easter heatwave has lifted spirits, boosting trade across hospitality & leisure and sports & outdoor retailers
  • The Barclaycard report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending

Card spending grew 17.7 per cent in March compared to the same period in 2019*, as Brits took advantage of the sunnier weather and lifting of all remaining Covid restrictions to visit pubs, dine out, and update their wardrobes in preparation for the months ahead. However, the cost of living is causing increasing concern for most UK adults, with travel plans and shopping preferences changing in response to rising fuel and food prices.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew 18.1 per cent in March, the highest uplift since September 2021. This was largely driven by spend on fuel, which soared 26.1 per cent as prices at the pump continued to climb.

In response to rising petrol and diesel prices, two fifths of drivers (41 per cent) say they are changing the way they travel. Of these, over half (54 per cent) are walking more often, almost two-fifths (38 per cent) are cutting back on long car journeys, and 22 per cent are opting to cycle instead.

Supermarkets saw a 16.9 per cent jump – higher than the growth recorded in both January (15.5 per cent) and February (16.0 per cent) this year – likely due to inflation and rising food prices. Feeling the pinch, 58 per cent of shoppers are looking for ways to stretch their weekly grocery budget; 52 per cent of this group are cutting down on luxuries, and 48 per cent are switching from branded to budget or own-branded goods.

Many are also buying in bulk to offset increasing prices and guarantee availability. More than a third (35 per cent) admit to stocking up on everyday items such as tinned and dried products (both 13 per cent), household supplies (11 per cent), and tea & coffee (10 per cent).

Spending on essentials was also boosted by a demand for convenience and the popularity of local shopping, with food & drink specialist stores (e.g. butchers, bakeries and online meal-kit providers) up 76.9 per cent compared to three years ago.

Despite the rising cost of living, Brits are still finding room in their budget for discretionary purchases, with non-essential spending up 17.5 per cent compared to the same period in 2019. Hospitality and leisure saw particularly strong growth, rising 18.3 per cent, boosted by a 41.7 per cent surge in spending at bars, pubs and clubs**, as the lifting of all remaining social distancing restrictions at the end of February encouraged Brits to flock back to beer gardens to enjoy the warmer weather.

Entertainment also enjoyed an uplift (20.3 per cent), driven by cinema-goers watching major releases such as ‘The Batman’, while takeaways and fast food soared 79.6 per cent compared to three years ago, reflecting a lockdown trend which has become a mainstay for many households.

The sunshine and a shift towards cycling in response to rising fuel prices may explain why shoppers spent more at both clothing and sports & outdoor retailers – up 10.1 per cent and 18.8 per cent respectively compared to 2019. One in five (18 per cent) is also buying products in anticipation of an April heatwave, with 24 per cent of sun-seekers purchasing spring or summer clothing, and 8 per cent buying sports equipment.

In a sign that the staycation boom is set to continue, hotels, resorts & accommodation enjoyed a boost of 15.3 per cent compared to the same period in 2019, as holidaymakers made plans to take trips and breaks across the UK.

Owing to the energy price cap increase on 1 April, over nine in 10 Brits (91 per cent) feel concerned about the negative impact of rising household bills on their household finances – a two per cent increase on February and five per cent higher than in December.

The cost of living squeeze is also causing the majority to worry about the financial impact of wider international conflicts and sanctions, inflation, and rising energy bills (all 89 per cent), as well as food prices (88 per cent). This could explain why optimism about the future of the UK economy has fallen to 27 per cent, its lowest level since January last year (24 per cent).

However, despite this challenging backdrop, Brits’ confidence in their own household finances remains steady at 62 per cent, as does confidence in their ability to spend within their means each month.

José Carvalho, Head of Consumer Products at Barclaycard, said: “Many sectors saw strong growth in March compared to the same period in 2019, as sunnier weather encouraged Brits to socialise at pubs and bars, book staycations and update their wardrobes for spring and summer.

“However, rising fuel prices and household bills are clearly starting to influence consumer behaviour, with many Brits changing their travel and shopping habits to save money. While this may dampen growth in the months ahead, we shouldn’t overlook the expected heatwave later in April, and the fast-approaching Easter holidays, both of which are likely to boost non-essential spending.”

*This month, we have changed the way we produce our monthly Consumer Spending Index. The March Consumer Spending Index calculations have moved to a three-year comparison (i.e. comparing March 2022 against March 2019), instead of a two-year comparison which started in March 2021. The data has been adjusted to account for consumer spending being heavily impacted by the lockdowns in March 2020 and March 2021. Measuring spending growth against the same period in 2019 provides a more accurate view of the UK’s long-term recovery from the impact of coronavirus, and of whether spending has returned to pre-pandemic levels. 

**The large growth in card spending recorded at pubs, bars and clubs between March 2019 and March 2022 can also be attributed in part to the rising popularity of Chip & PIN and contactless payments over cash payments – a long-term trend which accelerated during the pandemic.

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