June sees gradual recovery as warm weather and the reopening of shops steadies consumer spending

  • Spending on essentials grew 6.6 per cent, bolstered by the highest increase in supermarket expenditure since the start of the year
  • Non-essential spend fell 22.3 per cent – less sharply than in May – as the reopening of non-essential shops boosted consumer spending
  • While over half of Brits continue to avoid the shops, household confidence has held up as consumers save money by postponing summer holidays
  • The Barclaycard report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending

Consumer spending fell 14.5 per cent year-on-year in June – the smallest decline since lockdown began – with month-on-month figures showing an uplift as shops re-open.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew 6.6 per cent – an improvement of 5.7 per cent compared to May, which saw a 0.9 per cent increase. This was largely driven by shopping in supermarkets, with the category rising by 25.7 per cent overall – its sharpest since the start of the year. Online grocery spend also jumped significantly by 105.9 per cent year-on-year, as demand for home deliveries saw supermarkets increase their available slots for online orders.

While fuel spend saw an overall decline of 33.8 per cent, the drop was less severe than last month (-49.7 per cent) as warmer weather and easing of lockdown measures allowed more people to travel to see friends and family, and take day trips.

Spending on non-essential items fell 22.3 per cent; again an improvement on the decline seen in May (-36.9 per cent) as the gradual re-opening of non-essential shops saw general retailers increase by 31.7 per cent.

Remarkable upturns on month-on-month growth were seen across home improvement and DIY (+31.3 per cent vs. -3.2 per cent) and furniture (+17.6 per cent vs. -28.2 per cent) compared to May’s year-on-year figures. This was the first month since the start of 2020 that these categories saw growth, with Brits taking advantage of the recent sunshine to spruce up their homes and gardens.

Spending on electronics was another bright spot, with a 14.3 per cent year-on-year increase as the return of live sport – including the Premier League and Royal Ascot – led to increased purchases of home entertainment.

Brits are also clearly embracing more active lifestyles as spending at sports and outdoor retailers rose a significant 50 per cent in the week of 14th-20th June – when general shops were able to reopen – compared to last year. This also represents their best month of the year so far, with an improvement of 24.4 per cent compared to May’s growth. Bike stores performed particularly well as fitness enthusiasts took up cycling for leisure and transport.

While overall spending on eating and drinking declined by 56.4 per cent year-on-year, this represents a less steep drop than May (70.3 per cent). Takeaways and fast food rose for the first time since pre-lockdown with a 5.7 per cent yearly growth, as restaurants, pubs and cafes continued to establish takeaway and delivery services and Brits enjoyed al-fresco dining with friends.

There were signs, however, that the high street’s recovery may be a long one as over half (56 per cent) of consumers continue to avoid the shops. Three in 10 (31 per cent) Brits admit to delaying shopping because they are afraid of getting or spreading coronavirus, while 18 per cent say they are put off by crowds. New social distancing rules are providing some reassurance, with nearly a fifth (18 per cent) more likely to return to shops because of these precautions.

Household confidence has also held up at 68 per cent, perhaps due to the savings people are making by staying at home rather than taking a holiday. Over half (54 per cent) say they will spend less on holidays this summer and 30 per cent are not expecting to go away at all, even though they normally do. However, consumer confidence in the UK economy, and job security, remain low at 20 per cent and 41 per cent respectively.

Esme Harwood, Director at Barclaycard, said: “While shoppers remain understandably cautious, slowly but surely Brits are starting to spend again. Some retailers have seen really positive increases, particularly home improvement, DIY and sports and outdoor outlets, where spend has reached higher levels than before the onset of coronavirus, when spending at these stores was in decline. The recent VAT cut and meal vouchers are also a positive sign for the hospitality industry and it will be interesting to see how these measures impact consumer spending.

“It also seems shoppers are generally reassured by retailer efforts to take precautions and make their stores safer. As lockdown eases and Brits are encouraged to enjoy summer safely, it’s clear that people are making the most of a sense of normality again, with many of us travelling to see friends and family, eating al-fresco, and taking day trips.”

  Pure Spend Growth Pure Transaction Growth
Essential 6.6% -12.9%
Non-Essential -22.3% -22.9%
OVERALL -14.5% -19.2%
Retail 15.5% -1.7%
Clothing -28.3% -33.2%
Grocery 27.2% -2.3%
Supermarkets 25.7% -4.0%
Food & Drink Specialist 41.4% 10.5%
Household 23.6% 21.0%
Home Improvements & DIY 31.3% 36.0%
Electronics 14.3% 7.1%
Furniture Stores 17.6% 6.6%
General Retailers 31.7% 17.0%
General Retailers & Catalogues 65.7% 49.3%
Department Stores -32.1% -42.8%
Discount Stores 30.6% -2.8%
Specialist Retailers -11.8% -21.6%
Pharmacy, Health & Beauty -33.0% -34.8%
Sports & Outdoor 10.5% -17.0%
Other Specialist Retailers -5.1% -9.5%
Hospitality & Leisure -71.4% -65.3%
Eating & Drinking -56.4% -60.1%
Restaurants -86.0% -83.1%
Bars, Pubs & Clubs -93.0% -94.1%
Takeaways and Fast Food 5.7% -30.4%
Other Food & Drink -68.2% -64.2%
Entertainment -76.5% -80.0%
Hotels, Resorts & Accomodation -75.8% -87.5%
Travel -80.1% -71.1%
Travel Agents -85.0% -79.7%
Airlines -79.0% -79.2%
Other Travel -74.5% -70.4%
Other -19.8% -3.0%
Digital Content & Subscription 43.5% 45.8%
Fuel -33.8% -16.3%
Motoring -20.4% -46.2%
Other Services -23.0% -16.2%
Online 7.6% 29.9%
F2F -29.4% -34.7%

Notes to editors

In In the coming months, the Consumer Spending release will be based on a slightly adjusted dataset, following the launch of UK Spend Trends 2.0. The new offering builds on Barclaycard’s strong history of publishing insights about UK consumer spending, and provides an in-depth view into consumer spending across more than 250 industries, customer age demographics as well as online and in-store purchases.

*Established in 2014, Barclaycard issues a monthly press release commenting on consumer spending trends.

Barclaycard sees nearly half of the nation’s credit and debit card transactions, which provides us with unique insight into UK consumer spending. The monthly spending data in this press release is based on Barclaycard credit card and Barclays debit card transactions, and is analysed by the Barclays Market and Customer Insights team. It relates to the period 23 May 2020 to 26 June 2020. It is compared with 25 May 2019 to 28 June 2019.

The consumer confidence survey in this press release was carried out between 26 June and 29 June 2020 by Longitude Research on behalf of Barclaycard. There were 2,000 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.

For more information, please contact Julia Madden at julia.madden@barclaycard.co.uk or on +44 (0) 7788 359 181.

About Barclaycard

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. In the UK we process nearly £1 in every £3 spent using credit and debit cards, and in 2019 we processed over £272bn in transactions globally. 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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About Barclays Market and Customer Insights

Barclays Market and Customer Insights helps businesses keep up to date with spending trends, monitors their market position and enhances their understanding of customer behaviour, based on actual customer spending. Visit insights.uk.barclays/MCI or email contact-MCI@barclays.com.