consumer spending

Consumer spending grew 11.6 per cent in July as easing of restrictions saw Brits make the most of newfound freedoms

  • Entertainment saw growth for the first time since the pandemic began, as consumers bought tickets to the theatre, cinema and sporting events
  • Pubs, bars and clubs had a strong month, as Brits socialised in beer gardens and returned to nightclubs
  • A quarter of Brits say they have been dipping into savings to make the most of post-lockdown life
  • However, pent-up demand from lockdown appears to be cooling off in some sectors, such as restaurants and face-to-face retail
  • The Barclaycard report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending

Consumer card spending grew 11.6 per cent in July compared to the same period in 2019, as the heatwave and easing of restrictions saw Brits make the most of their newfound freedoms.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew 14.0 per cent last month, compared to July 2019. This was driven by supermarket shopping (+16.6 per cent) and spend at specialist food and drink stores (+78.5 per cent), as Brits hosted get-togethers to celebrate sporting events and social occasions. 

Fuel spend was up 4.1 per cent, the highest since before the onset of the pandemic in the UK, which can be attributed to rising prices at the pump, and more people setting off on staycations or returning to commuting to the office by car.

Spending on non-essential items also recorded its highest growth since before the first UK lockdown, rising 10.4 per cent. This comes as one in four (25 per cent) consumers say they have been dipping into their savings to make the most of post-lockdown life – a figure that rises to 39 per cent among 18–34-year-olds.

The entertainment industry saw growth for the first time in over 16 months, up 8.1 per cent, as consumers bought tickets to the theatre, cinema and sporting events. This comes as 32 per cent of Brits say they expect to spend more on leisure activities and day trips this summer, and 16 per cent plan to spend more attending shows and events – a welcome sign that further growth may be on the horizon.

Pubs, bars and clubs had another strong month, recording 30.5 per cent growth when compared to July 2019, as Brits socialised in beer gardens and returned to nightclubs for evenings out.

While the travel sector continued to face challenges, it may be reassured by figures indicating that overseas bookings are increasing, as spending on airlines (-56.2 per cent) and travel agents (-66.6 per cent) showed less of a decline than in June (-70.9 per cent and -75.3 per cent respectively). Meanwhile, the market for UK staycations continued to see promising growth, with spending on hotels, resorts and accommodation rising 7.8 per cent – its highest growth since before the first coronavirus lockdown.

However, there are signs that the initial pent-up demand from lockdown is cooling off in certain sectors. For example, restaurant spending had been improving steadily since restrictions began to ease in March, closing the gap on 2019, but last month there was a dip in spending and the gap widened again to -13.1 per cent.

In contrast, takeaways saw record growth of 72.3 per cent – the highest since before the onset of the pandemic – as friends and families watched events such as the Euros and Wimbledon at home while treating themselves to food deliveries.

Face-to-face retail (excluding grocery) also saw a drop in demand last month, following a post-lockdown boom, as spending slipped back into decline (-0.2 per cent). At the same time, online retail (excluding grocery) continued to perform well, growing 47.4 per cent, as consumers continued to enjoy the convenience of internet shopping.

While confidence in household finances held up at 72 per cent, confidence in the UK economy has dipped slightly, down 3 per cent to 33 per cent. This comes as six in 10 (61 per cent) consumers are worried that everyday expenses will increase as restrictions lift, and more than half (55 per cent) say they are being much more careful to seek value in the purchases they make.

Raheel Ahmed, Head of Consumer Products, said: “July’s major sports fixtures and the heatwave kept the nation in good spirits, providing more reasons to celebrate together, and giving the entertainment industry its long-awaited boost back into growth.

“While some sectors took a small step back as the post-lockdown ‘honeymoon’ period cooled, July was a positive month overall. However, with inflation expected to rise, it will be interesting to see how this impacts consumer spending behaviour over the coming months.”

 

Spend Growth

Transaction Growth

     

Essential

14.0%

8.1%

Non Essential

10.4%

18.2%

     

OVERALL

11.6%

13.9%

Retail

21.7%

12.5%

Clothing

3.8%

-11.0%

Grocery

21.2%

12.5%

Supermarkets

16.6%

5.7%

Food & Drink Specialist

78.5%

69.9%

Household

23.1%

8.7%

Home Improvements & DIY

24.4%

15.4%

Electronics

14.6%

0.9%

Furniture Stores

32.3%

7.7%

General Retailers

34.7%

28.0%

General Retailers & Catalogues

53.3%

47.4%

Department Stores

-1.5%

-11.0%

Discount Stores

27.6%

13.6%

Specialist Retailers

19.0%

5.5%

Pharmacy, Health & Beauty

12.0%

0.0%

Sports & Outdoor

23.7%

5.1%

Other Specialist Retailers

22.4%

11.4%

Hospitality & Leisure

-4.7%

17.5%

Digital Content & Subscription

57.6%

54.0%

Eating & Drinking

34.7%

21.6%

Restaurants

-13.1%

-29.0%

Bars, Pubs & Clubs

30.5%

29.8%

Takeaways and Fast Food

72.3%

36.3%

Other Food & Drink

28.2%

15.9%

Entertainment

8.1%

5.7%

Hotels, Resorts & Accommodation

7.8%

1.9%

Travel

-51.5%

-13.3%

Travel Agents

-66.6%

-49.0%

Airlines

-56.2%

-52.8%

Other Travel

-20.2%

11.7%

Public Transport

-36.6%

-18.1%

Other

7.5%

10.8%

Fuel

4.1%

5.6%

Motoring

4.6%

6.1%

Other Services

11.7%

24.7%

     

Online

23.5%

49.0%

F2F

3.6%

3.0%

 

– Ends –

Notes to editors

We have changed the way we produce our monthly Consumer Spending Index. Starting in March, all calculations moved to a two-year comparison (i.e. comparing July 2021 against July 2019), instead of a year-on-year comparison. This includes any prior period comparisons included in the release (e.g. comparing August 2020 to August 2018), to ensure that all comparisons are like-for-like. This provides a more realistic view of the UK’s long-term recovery from the impact of coronavirus, and of whether spending has returned to pre-pandemic levels.  

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 26th June to 23rd July 2021. It is compared with 29th June to 26th July 2019.

The consumer confidence survey in this press release was carried out between 23rd and 26th July 2021 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 please contact Oliver Stevenson at oliver.stevenson@barclaycard.co.uk  or on +44 (0)7880 184 177 or Rebecca Butler at rebecca.butler@barclaycard.co.uk or +44 (0)7881 318 767.

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 2020 we processed over £267bn 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.