Consumer spending grew 0.2 per cent in August, the first uplift since February

  • Spending on essentials grew 5.1 percent, with the number of fuel transactions returning to similar levels seen last year
  • Clothing spend increased for the first time since March 2019, as shoppers took advantage of end-of-season sales
  • Spending at pubs and bars was a bright spot, with 9.3 percent growth in transactions – the first uplift since lockdown began
  • Confidence in the UK economy fell to 19 percent, yet household confidence remained steady as holidaymakers postponed trips abroad
  • The Barclaycard report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending

Consumer spending grew 0.2 percent year-on-year in August – the first uplift since February 2020 – as Brits enjoyed the last of summer by socialising and holidaying in the UK. 

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew 5.1 percent year-on-year, largely driven by supermarket shopping which was up 14.9 percent.

While lower prices at the petrol pump contributed to fuel spend declining 13.3 percent, the number of transactions returned to similar levels seen last year, down just 2.4 percent, as Brits embarked on staycations and gradually started returning to workplaces.

Spending on non-essential items contracted 1.6 percent – the smallest fall since the onset of lockdown – as the nation became more comfortable visiting stores. In a positive sign for the retail sector, clothing saw growth of 0.3 percent, the first increase 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 percent) in the category since February 2020.

Despite a steady return to the high street, the data indicates the months of lockdown have accelerated a sustained shift towards online shopping. The highest category increases are seen across supermarkets, which showed a considerable 102.7 percent year-on-year rise as the popularity of online food orders prevailed, and online clothing, which grew 24.3 percent.

Spending at pubs and bars** was a bright spot, with year-on-year growth in transactions of 9.3 percent – the first uplift since the start of lockdown – as punters took advantage of the last of summer by socialising with friends and family.

However, while some Brits enjoyed getting out and about, it seems lockdown has also increased the shift towards online when it comes to meal times too. Takeaways & fast food saw their highest increase (20.7 percent) since tracking began for this category in September 2019, while meal subscription services rose by 65.8 percent as fresh, hassle-free dinner options became a mainstay in many households.

In a hopeful sign for the leisure sector, hotels, resorts & accommodation saw their smallest decline since lockdown began, at -19.1 percent year-on-year; an improvement on July (-29.9 percent) as holidaymakers booked staycations during the school summer holidays. However, travel – including airlines and travel agents – declined by 61.0 percent compared to August 2019, as international travel restrictions and quarantine guidelines continued to impact the sector.

While the nation’s confidence in the UK economy has fallen to its lowest (19 percent) since Barclaycard started the Index six years ago (compared to 42 percent in January and February 2020), confidence in household finances remains steady at 68 percent. This can perhaps be attributed to the fact that 45 percent have saved money because they were unable to go abroad this summer, with nearly a quarter (23 percent) putting the money into savings instead.

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.”

*Established in 2014, Barclaycard issues a monthly press release commenting on consumer spending trends.

Barclaycard sees nearly half of the nation’s credit and debit card transactions, which provides us with unique insight into UK consumer spending. The monthly spending data in this press release is based on Barclaycard credit card and Barclays debit card transactions, and is analysed by the Barclays Market and Customer Insights team. It relates to the period 25th July 2020 to 21st August 2020. It is compared with 27th July 2019 to 23rd August 2019.

The consumer confidence survey in this press release was carried out between 21st August and 24th August 2020 by Longitude Research on behalf of Barclaycard. There were 2,002 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.

**This category includes pubs, bars, and clubs, with clubs making up less than 2% of the overall figure. 

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