Consumer card spending grew just 2.6 per cent year-on-year in October – noticeably less than the latest CPIH inflation rate of 6.3 per cent and the smallest uplift since September 2022 (1.8 per cent) – as Brits’ concern over rising energy bills and outgoing costs ahead of the festive period hindered discretionary spending.
On a brighter note, the Rugby World Cup boosted pubs and bars for the second month running, while the travel sector performed well as holidaymakers booked getaways in the UK and abroad.
The Rugby World Cup continued to boost pubs, bars & clubs (up 5.9 per cent), as sports fans gathered to cheer on their respective teams. The travel sector (up 10.5 per cent) had another strong month, making it one of the best-performing categories in 2023. Travel agents (9.6 per cent) had their highest uplift since May (9.9 per cent), while hotels, resorts and accommodation saw 7.4 per cent growth.
Spending on essential items saw a smaller increase (3.9 per cent) than last month (4.6 per cent). This was largely due to supermarkets (5.3 per cent) and specialist food and drink stores (5.9 per cent) seeing less of an uplift than in September (6.9 per cent and 8.0 per cent respectively), as food price inflation continued to fall and most consumers (69 per cent) continued to look for ways to reduce the cost of their weekly shop.
Of those seeking savings, 45 per cent are using vouchers or loyalty points to get money off shopping and 38 per cent are visiting multiple supermarkets to source a range of deals. A further 17 per cent are also choosing to buy products they see as more affordable, such as fresh foods that are in season as well as pre-prepared or processed foods, such as ready meals (11 per cent).
“Bring Your Own Food (BYOF)” emerges as a budget-stretching hack
To save money during days out, seven in 10 Brits (71 per cent) say they now take food and drink from home, to avoid paying premium prices at venues where meals and snacks are often more expensive. Long car trips are the most common situation where Brits “BYOF” (41 per cent), followed by train journeys (30 per cent) and trips to the cinema (29 per cent).
Other popular destinations to “BYOF” include the office (27 per cent), theme parks (21 per cent), airports/flights (20 per cent), festivals (10 per cent) and festive winter markets (8 per cent). By bringing their own food and drink from home to these venues, Brits save an estimated £472.60 per person, per year.
Festive costs front of mind
Looking ahead, over a third (36 per cent) expect that this Christmas will be more expensive than in 2022, and a fifth (21 per cent) have concerns about keeping up with outgoing costs during the festive period. As a result of the rising cost-of-living, two fifths (37 per cent) expect they will spend less on Christmas gifts this year, while just 13 per cent anticipate spending more.
However, Brits are still looking for and finding economical ways to enjoy seasonal celebrations. Nearly one in five (18 per cent) has already started buying gifts to spread out the cost, while 14 per cent have spoken to loved ones to make a mutual agreement to cut back on gift-giving.
Esme Harwood, Director at Barclays, said:
“Brits cut back on non-essential categories such as clothing and restaurants in October, as thoughts turned to saving for Christmas and budgeting for winter fuel bills. The unseasonably warm weather also hampered spending on indoor experiences, including digital streaming services and takeaways. However, pubs, bars & clubs still achieved strong growth, boosted by England’s performance at the Rugby World Cup, while the travel sector benefitted from a rise in holiday bookings.
“At the supermarket, value-for-money is still a priority, with consumers increasingly wary of “slack-filling”, when a product’s packaging hides unnecessary empty space inside. On a brighter note, supermarkets are also being given credit for trying to keep prices down, with one in three noticing price cuts on everyday items.”
Jack Meaning, Chief UK Economist at Barclays, said:
“It looks as though the oomph continues to go out of squeezed UK consumers. The latest transaction data shows they are pulling back from discretionary spending and increasingly worried about their future ability to spend, adding to the picture painted by other data. Third-party consumer confidence data showed a significant drop in October, coming off the back retail sales contracting significantly in September. While some of these effects might be being amplified by unseasonal weather, it’s hard to dismiss the growing evidence.”