Consumer spending sees muted growth of 1.7 per cent in July but is boosted by strong ticket sales of summer blockbusters
- A contraction in essential spending kept overall figures subdued, impacted by declines in petrol and supermarket expenditure
- Retail continued to struggle, with department stores contracting by 3.9 per cent
- The entertainment sector propped up non-essential spend, as consumers flocked to cinemas to see blockbuster releases such as Toy Story 4 and The Lion King
- Airline expenditure bounced back from three consecutive months of decline to grow by 3.7 per cent
- Consumer confidence remains low, with just 29 per cent of UK adults feeling positive about the state of the UK economy
Consumer spending grew by 1.7 per cent year-on-year in July – representing a decline in real terms when accounting for inflation – following similarly muted figures in May and June.
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, shows that essential spending contracted by 0.9 per cent as supermarkets and petrol both saw a decline of 0.7 per cent and 2.4 per cent respectively.
Non-essential spending, however, remained in positive territory at 2.4 per cent growth, bolstered by consumers continuing to spend on entertainment and experiences. Following the release of Disney blockbusters such as The Lion King and Toy Story 4 in cinemas, ticket sales showed strong growth of 14.8 per cent.
Meanwhile, restaurants enjoyed a 10.1 per cent uplift, as Brits took advantage of the long summer evenings by relaxing and dining out. Pubs saw growth of 5.6 per cent, a fairly modest rise compared to July 2018, when the heat wave and World Cup fever led to a boom in pub spending (up 16.8 per cent year-on year).
Travel grew by 2.6 per cent as airline expenditure bounced back from three consecutive months of decline to grow by 3.7 per cent, with many consumers taking advantage of discounting and the sales to enjoy a last-minute summer break.
Retail, on the other hand, continued to struggle, with department stores contracting by 3.9 per cent.
July’s overall figure followed similarly muted results from May and June, with consumer spending showing growth of 1.1 per cent and 0.9 per cent respectively.
This is reflected by a fall in consumer confidence, with just 29 per cent of UK adults feeling positive about the state of the UK economy. In addition, a quarter of consumers (23 per cent) now say they are uncertain about their job security – the highest this figure has been in over two years.
This unease about the economy and jobs may also be causing Brits to rein in their spending. Just 54 per cent are confident in their ability to spend on non-essential items – a drop of six percentage points since last month.
Furthermore, almost a third (32 per cent) say they are holding off on making a major purchase until the economy becomes more settled – indicating that consumers are cutting back on discretionary spending.
Esme Harwood, Director at Barclaycard, said: “Spending has remained relatively subdued over the past few months, with an underlying uncertainty about the wider economic and political landscape causing many to hold off making purchases on bigger ticket items.
“However, on a brighter note, box office hits such as The Lion King and Toy Story 4 have helped boost spending as consumers continue to prioritise dining out and enjoying trips to the cinema and theatre this summer.”
Notes to editors
For more information please contact Rebecca Butler on +44 (0) 207 116 1993 email@example.com
The monthly spend data in this release relates to the period 23 June 2019 – 20 July 2019. It is compared with 23 June 2018 – 20 July 2018.
The consumer confidence survey used for this release was carried out between 19 and 22 July 2019 by Longitude Research on behalf of Barclaycard. There were 2,003 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.
Barclaycard, part of Barclays Bank PLC, is a leading global payment business that helps consumers, retailers and businesses to make and take payments flexibly, and to access short-term credit and point-of-sale finance. In 2018 we processed nearly £268bn in transactions globally. Barclaycard is a pioneer of new forms of payment and is at the forefront of developing viable contactless and mobile payment schemes for today and cutting-edge forms of payment for the future. We also partner with a wide range of organisations across the globe to offer their customers or members payment options and credit.
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