Consumer spending grew 4.4 per cent year-on-year in October, maintaining a modest level of growth, as the retail sector continues to face challenges.
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, shows that essential spending rose 4.8 per cent year-on-year, as petrol expenditure remained high with 10.3 per cent growth.
Non-essential expenditure, meanwhile, demonstrated a reasonable increase of 4.1 per cent. Entertainment was the driving force behind this, rising 10.8 per cent – powered by strong performances from pubs (11.7 per cent) and restaurants (8.6 per cent).
Entertainment was also boosted by ticket sales which performed particularly well at 22.1 per cent growth. This follows Glastonbury Festival tickets going on sale after the festival’s fallow year, alongside blockbuster film releases such as Venom and A Star is Born.
The retail sector, however, continued to struggle. Department store spending contracted by 5.9 per cent amidst high profile store closures, while spending on electronics reached just 1.8 per cent growth, below the rate of inflation. Clothing spending also declined by 2.4 per cent – the biggest dip since October 2017.
This slowdown in clothing spending could be due to the warmer-than-usual weather experienced during much of October, as a fifth (19 per cent) of consumers say they have postponed making winter wardrobe purchases this year.
More broadly, stronger average earnings growth in the UK helps explain why one fifth (19 per cent) say their wages have gone up enough for them to have a little more money to spend each month. Yet Brits remain cautious with their money. Of those with more money to spend following a pay rise, half (49 per cent) are saving their extra money or paying off debt, and a third (36 per cent) are currently putting it towards Christmas.
This caution reflects wider opinion of the nation’s economy. Just 28 per cent of UK consumers now say that they have confidence in the UK economy – the joint lowest level since Barclaycard started monitoring consumer confidence in 2014.
Esme Harwood, Director at Barclaycard, said: “While the retail sector has continued to face challenges, the experience economy provided a welcome boost to overall spending in October with consumers going for meals out and purchasing tickets to events and shows.
“Ongoing economic and political uncertainty has led to a decline in confidence, with consumers remaining cautious with their spend in the run-up to Christmas.”