Barclays: Card Spending Falls Slightly In June

• Confidence in household finances reached its highest point since February, as consumers shored up their finances in light of the current economic outlook
• These budgeting behaviours led essential spend to contract -2.1 per cent, while soaring temperatures did not translate into a typical high street bounce
• Health & beauty and furniture grew by 10.1 per cent and 8.2 per cent, outperforming overall retail
• Cinemas had a blockbuster month up 26.9 per cent following the release of Mission: Impossible – The Final Reckoning and How to Train Your Dragon
• The Barclays Consumer Spend report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending 

Consumer card spending fell -0.1 per cent year-on-year in June, less than the 1.0 per cent reported in May and below the latest CPIH inflation rate of 4.0 per cent. Confidence in household finances improved six percentage points to 73 per cent – a four-month high. Meanwhile, essential spend contracted -2.1 per cent, down from -1.1 per cent in May. The onset of summer festivals, weddings and sporting events contributed to a marginal 0.8 per cent increase in non-essential spending, led by the strong performance of entertainment and health & beauty.

Despite England’s warmest June on record, spend growth was muted; the 0.8 per cent rise in discretionary spend represents the lowest growth since November 2024 (also 0.8 per cent). Although sunshine typically encourages trips to the high street, the overall eating & drinking category decreased -0.5 per cent, while retail was flat, growing just 0.2 per cent. This comes as almost three in 10 (28 per cent) said they would cut spending on restaurant meals and new clothes and accessories respectively.

Consumers brace for rising costs

UK consumers’ confidence in their household finances and ability to live within their means reached their highest points since February, at 73 per cent and 76 per cent respectively. Taking steps to shore up their finances, seven in 10 (69 per cent) have made financial adjustments in light of the current economic outlook, with one in three (34 per cent) building a savings buffer in case costs rise.

In response to the Government’s June 2025 Spending Review, a quarter (27 per cent) expect their energy bills to go up, and a fifth (19 per cent) anticipate their essential spending will increase. Separately, three quarters (76 per cent) are concerned about the impact of ongoing geo-political instability on their household finances.

Furniture stores shine

Despite a slower month for retail, furniture stores enjoyed a particularly strong June, up 8.2 per cent – the category’s highest increase since March 2022. This is potentially due to new homeowners furnishing their new properties; record numbers of mortgage completions took place in March 2025, particularly among first-time buyers, where completions jumped 70 per cent compared to February, ahead of April’s stamp duty changes.

Pharmacy, health & beauty also bucked the overall retail trend, up 10.1 per cent likely in part due to the purchase of seasonal staples such as hay fever medication, suncream and everyday cosmetics; three in 10 (28 per cent) shoppers reported spending more on suncream in June, with 18 per cent upping spending on hay fever medication. 

Summer blockbusters provide cinemas with seasonal boost

The overall hospitality and leisure sector grew 2.1 per cent year-on-year, led by the strong performance of entertainment, up 8.0 per cent. Live shows & concerts grew 2.5 per cent, as one in five (18 per cent) UK adults said they would be spending money to attend summer concerts and events such as BST: London Hyde Park, Beyonce, and Pitbull, at an average of £160.80 in total each.

Cinema spend increased 26.9 per cent, owing to highly anticipated blockbusters such as Mission: Impossible – The Final Reckoning and How to Train Your Dragon. With a summer of sport well under way, the small screen also fared well. Digital content & subscriptions saw growth of 7.0 per cent, helped by subscription-only sports viewing of Formula 1 and the British & Irish Lions rugby tour.

Karen Johnson, Head of Retail at Barclays, said: “Despite the warm weather, which usually boosts non-essential sectors such as retail and hospitality, consumers spent cautiously in June, prioritising value as they navigate economic uncertainty. Encouragingly, entertainment, beauty and furniture stores bucked the trend, while confidence in household finances improved, showing consumers’ willingness to spend on the things that matter most to them.”

Jack Meaning, Chief UK Economist at Barclays, said: “The economy has cooled throughout through Q2, but our data does show pockets of strength. However, with both global and domestic uncertainty, and temporarily heightened inflation likely to continue, consumers are remaining cautious and maintaining savings buffers. We expect this to lead to limited GDP growth for the remainder of this year, before falling interest rates and a stronger sense of certainty drive a return to growth next year.”

Overall growth figures

Source : Barclays

Image : Cunaplus_M.Faba / iStock / 1087671624

For all the very latest news and intelligence on the UK's largest home improvement and garden retailers, sign up for the Insight DIY weekly newsletter.