Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that consumers continued to manage their spending cautiously following months of rising prices and stagnant wage growth, however spending in pubs and restaurants or riding the storm.
Tough times endured on the high street with in-store spending at -0.1 per cent, the seventh straight month in negative territory. Although online spending posted a double-digit increase of 10.8 per cent, this is down from an August high of 15.7 per cent, with November marking the third successive month in which growth in online spend has slowed.
Essential spending growth of 3 per cent was broadly in line with October’s figure (2.9 per cent). Growth in non-essentials, however, rebounded as consumers tweaked their allocation of spending on the ‘nice-to-haves’, rising 2.8 per cent from 2.2 per cent.
Brits opted to spend on leisure time with friends and family as the nights drew in, helping pubs (11 per cent) and restaurants (12.1 per cent) return to levels seen earlier this year, after a brief slowdown in the three months to October. This pushed up entertainment spending to 9.5 per cent, its best performance since July.
November’s muted spending figures reflect the cautious mood of the nation. Only 30 per cent of consumers feel confident in the UK economy, down from 37 per cent at the end of September. A gap of 30 percentage points now exists between those who are confident and those who are not – the second widest since Barclaycard began tracking consumer confidence in 2014.
Paul Lockstone, Managing Director at Barclaycard, said:
“Consumer sentiment has deteriorated over the last couple of months after a prolonged period of falling purchasing power. Against this backdrop, it’s not surprising that consumers continue to spend conservatively, leading to a second successive month of contraction in real terms.
“While entertainment spend brought some welcome relief, growth on essentials outstripped expenditure on nice-to-haves for the third month in a row, indicating that shoppers are prioritising carefully. Nevertheless, the search for value continues with Brits seeking sales and discounts, making the most of their budget during the festive season – as we saw with a strong performance on Black Friday.”