Consumer spending grew by 1.3 per cent year-on-year in August – representing a decline in real terms when accounting for inflation – bringing a summer of muted growth to a close. However, non-essential spending rose by 1.4 per cent, bolstered by strong growth from pubs (10.9 per cent) and restaurants (8.6 per cent) as Brits enjoyed relaxing and dining out.
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, shows that essential spending rose by just 0.6 per cent, with petrol contracting by 1.9 per cent and supermarket expenditure increasing by a modest 1.3 per cent.
Travel increased by a modest 0.6 per cent, with travel agents up 1.0 per cent, whereas airlines and hotels contracted by 0.4 per cent and 0.2 per cent respectively.
In contrast to the overall trend seen by the retail sector in recent months, spending at discount stores rose by 8.0 per cent – suggesting that many consumers are seeking better value for money in the purchases they make.
More broadly, August’s overall spending figure of 1.3 per cent was relatively low in comparison to August 2018, which saw growth of 4.5 per cent year-on-year.
Economic uncertainty continues and the effect of the weak pound weighed heavily on consumers’ minds in August. Only 31 per cent of UK adults suggest they are confident in the UK economy while over half (52 per cent) are worried about the impact of rising prices over the next month.
As a result of their concerns about inflation, over a third of Brits (36 per cent) plan to adapt their buying behaviour. Most commonly, these consumers say they will visit discount stores more often to balance the household budget, with 43 per cent planning to seek out bargains this way. This is followed by cutting back on treats (33 per cent) and looking for more discounts online (33 per cent).
Almost one in five Brits (17 per cent) is stockpiling everyday items in case of shortages in the future – rising to a quarter (25 per cent) of 18-34 year olds. Tinned foods, household supplies and dried goods top the list of products being stockpiled.
Esme Harwood, Director at Barclaycard, said: “August’s figures signal the end of a fairly subdued summer for consumer spending – showing a marked contrast to the previous August. A weak pound and worries about rising prices are causing concern for many, with Brits looking to better balance their household budgets.
“That said, spending at pubs and restaurants remains robust, suggesting Brits have been making the most of the longer days by relaxing and dining out.”