Consumer spending in November grew by just 0.9 per cent year-on-year, representing a decline in real terms when accounting for inflation, as restrained expenditure continues ahead of Christmas, however pubs and bars were once again the overall winners.
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essentials showed no movement at 0.0 per cent – as fuel spending dropped by 3.1 per cent and supermarkets rose marginally by 1.0 per cent.
Spending on non-essentials was up 1.3 per cent, presenting a mixed picture across the board for retailers. As shoppers continue to seek out value for money, discounts stores were a bright spot with 6.9 per cent growth while department stores saw a sharp drop of 5.9 per cent, and electronics and clothing retailers fell by 5.0 per cent and 3.3 per cent respectively.
Consumer spending in bars, pubs and clubs saw good growth at 8.7 per cent as Brits enjoyed nights out with friends and family. However, this did not bring any relief to restaurants, which declined by 5.2 per cent. Takeaways and fast food, meanwhile, saw a rise of 11.4 per cent as the colder weather and longer nights saw diners take advantage of food delivery apps over venturing out for a meal.
In line with this trend, digital content and subscriptions continued to show strong growth, up 14.6 per cent – a marker of services such as Netflix and Amazon Prime continuing to rise in popularity.
Meanwhile, entertainment contracted by 13.0 per cent, driven by a downturn in spending on shows and concerts, possibly in part due to the ongoing impact of ticket resale legislation.
Consumers remain prudent ahead of the festive season with 36 per cent intending to spend less than usual on Christmas this year, with 42 per cent of those cutting back saying it’s because they are looking to spend less money overall.
What’s more, 55 per cent of Brits are now concerned about potential rising prices of everyday goods impacting their ability to spend money, an increase of 4 percentage points from last month.
With an election on the horizon, this caution is reflected in overall consumer attitudes. Positive sentiment about the UK economy remains low, with only 31 per cent of UK adults expressing confidence – dropping to just 27 per cent for those aged 18-34.
Esme Harwood, Director at Barclaycard, said: “With a backdrop of political uncertainty, consumer confidence has remained low this month – particularly amongst younger consumers – as Brits focus on discount shopping in a bid to tighten their purse strings this Christmas.
“Throughout 2019 we have seen the nation managing their budgets by seeking greater value for money, and this trend looks set to continue in December. As we head into the busy shopping season, retailers will no doubt be crossing their fingers for consumer confidence to rise enough to deliver some Christmas cheer”.
