Consumer card spending grew 1.8% year-on-year in September – the smallest increase since February 2021 – as Brits cut back on discretionary purchases in response to rising living costs, new research reveals.
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew 3.3% compared to the same period in 2021 – the smallest rise this year. This muted growth was largely due to supermarkets only seeing a small uplift (2.8%), as well as food and drink specialist stores falling back into decline (-3.7%) after a 0.6% growth in August.
Additionally, 67% of consumers say they are looking for ways to reduce the cost of their weekly shop. Of these shoppers, 43% are paying closer attention to the prices of items they buy regularly, 40% are cutting down on luxuries or one-off treats for themselves, and 36% are purchasing own-brand or value ranges in supermarkets.
Spend on fuel saw its smallest uplift (11.1%) since March 2021, likely owing to the average price of fuel falling gradually in recent months, as well as drivers reducing the use of their own cars. To save on petrol and diesel costs, 13% have started to walk or cycle to work, while 12% are using public transport more often.
The research shows 53% of consumers say they are planning to cut down on discretionary spending so they can afford their energy bills throughout the autumn and winter, with the majority of Brits in this group cutting back on eating out at restaurants (60%) and drinking in pubs, bars & nightclubs (47%).
To save money, over half of Brits (51%) are planning to spend more evenings at home over the coming months.
Esme Harwood, Director at Barclaycard, said: “Energy price increases are understandably causing concern for Brits, as they worry whether they will have enough money to cover their household bills.
“Consumers are taking a savvy approach to budgeting as they reduce spending on discretionary items and seek more value in their weekly shop, which is having a knock-on effect on retail and hospitality sectors.”
Despite ongoing inflationary pressures, confidence in household finances has remained steady (59%) since last month (60%), though this is a notable decline from the level of confidence two months ago (66%) and an even steeper drop compared to a year ago (68%).
