Consumer card spending fell -0.3 per cent year-on-year in July – a slight improvement on June (-0.6 per cent) but noticeably lower than the latest CPIH inflation rate of 2.8 per cent – as the mixed weather across the month, combined with Brits’ selective discretionary spending, continued to pose challenges for retailers.
However, the final stages of Euro 2024 boosted pub sales, while travel spending remained resilient as holidaymakers paid off the last of their monthly instalments.
Pubs, bars and clubs saw an uplift of 4.9 per cent in July – the category’s highest growth since January – as football fans flocked to their local to watch the final rounds of the Euro 2024 tournament. Despite England’s loss, the final against Spain led to payment transactions almost tripling at pubs and bars on 14th July, increasing by 195.6 per cent year-on-year1. This also marked the busiest Sunday of the year for pubs, with transaction volumes up 92.9 per cent compared to the average Sunday in 2024.
Spending on non-essential items saw further decline in July (-0.7 per cent) compared to June (0.5 per cent), with 48 per cent of Brits making the effort to cut down on discretionary spending (up from 46 per cent last month). This comes as one in four (23 per cent) say they have participated in or would consider a ‘no-spend challenge’, where they refrain from making non-essential purchases, such as takeaways, coffees and clothes, but still spend on essentials, such as food, childcare and utilities.
Entertainment spending was down -6.1 per cent year-on-year, marking its greatest decrease since March 2021. This can be attributed to particularly strong growth for entertainment during the same period last year, at 15.8 per cent.
Encouragingly, consumers continue to spend on experiences, with travel up 4.3 per cent – on par with June’s growth. Travel agents saw a higher increase of 6.6 per cent year-on-year, as holidaymakers settled final costs for their summer getaways.
On the other hand, fast food and takeaways saw muted growth compared to June, increasing just 2.2 per cent. Of the 48 per cent planning to limit discretionary expenditure, almost half (47 per cent) are cutting back on ordering takeaways.
Confidence in the UK economy improved by five percentage points in July, rising to 32 per cent – the highest level since February 2022. However Brits’ confidence in their household finances and ability to live within their means both declined, at 65 per cent (down two percentage point) and 70 per cent (down three percentage points) respectively. Following news in July that water bills will rise by almost £100 over the next five years, a third of Brits (32 per cent) said they were very concerned about the negative impact that this would have.
Karen Johnson, Head of Retail at Barclays, said:
“Shoppers and retailers alike will be ready to see the end of the summer showers. It’s encouraging to see seasonal staples such as BBQ supplies, beauty buys and holiday planning delivering signals of steady recovery.
“Despite England losing in the nail-biting final of the Euros, UK hospitality emerged as a true winner, when the Euros delivered a boost for pubs, bars and clubs. With the final days of the Olympics in Paris, Taylor Swift’s return to a sold-out Wembley Stadium for her final UK Eras Tour dates, and a heatwave on the cards, we hope summer spending will finish strongly in August.”
