Consumer spending grew 0.2% year-on-year in August – the first uplift since February 2020 – as Brits enjoyed the last of summer by socialising and holidaying in the UK.
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, revealed that spending on essential items grew 5.1% year-on-year, largely driven by supermarket shopping which was up 14.9%.
Spending on non-essential items contracted 1.6% – the smallest fall since the onset of lockdown – as the nation became more comfortable visiting stores. In a positive sign for the retail sector, clothing saw growth of 0.3%, the first increase since March 2019, as shoppers took advantage of end-of-season sales. Spending at department stores also saw improvement, with the smallest drop (-3.6%) in the channel since February 2020.
Despite a steady return to the high street, the data indicates the months of lockdown have accelerated a sustained shift towards online shopping. The highest channel increases are seen across supermarkets, which showed a considerable 102.7% year-on-year rise as the popularity of online food orders prevailed, and online clothing, which grew 24.3%.
While lower prices at the petrol pump contributed to fuel spend declining 13.3%, the number of transactions returned to similar levels seen last year, down just 2.4%, as Brits embarked on staycations and gradually started returning to workplaces.
While the nation’s confidence in the UK economy has fallen to its lowest (19%) since Barclaycard started the Index six years ago (compared to 42% in January and February 2020), confidence in household finances remains steady at 68%. This can perhaps be attributed to the fact that 45% have saved money because they were unable to go abroad this summer, with nearly a quarter (23%) putting the money into savings instead.
