UK DIY News
Barclays: Improving Consumer Confidence Boosts Card Spending in September
- A 17.3 per cent uplift in fuel spending drove a 2.5 per cent increase in essential spend, after diesel prices hit record highs
- Confidence in household finances reached a seven month-high, despite seven in 10 consumers citing pre-Budget concerns
- Hospitality & leisure spending grew 2.7 per cent, with eating & drinking benefitting from September’s warm weather
- The Barclays Consumer Spend report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending
Card spending rose 2.0 per cent year-on-year in September, just below August’s 2.1 per cent growth, and remaining below the latest CPIH inflation rate of 3.3 per cent. Essential spending increased 2.5 per cent, outpacing the 1.8 per cent increase in non-essential spending, driven largely by a 17.3 per cent spike for fuel. Meanwhile continued demand for meals and drinks out supported hospitality & leisure’s 2.7 per cent boost.
Confidence in household finances climbed to a seven month-high at 67 per cent, while confidence in job security (45 per cent), and consumers’ ability to live within their means (73 per cent) also improved (up from 44 per cent and 71 per cent respectively). Confidence in the UK economy stabilised at 26 per cent – on par with August’s figure.
Barclays consumer confidence measures | |||||||||
| Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep |
Household finances | 66% | 67% | 65% | 64% | 65% | 64% | 64% | 66% | 67% |
Job security | 43% | 44% | 44% | 43% | 43% | 46% | 47% | 44% | 45% |
Ability to spend on non-essentials | 54% | 55% | 53% | 49% | 52% | 51% | 53% | 54% | 54% |
Ability to live within means | 71% | 74% | 71% | 69% | 70% | 70% | 69% | 71% | 73% |
Strength of the UK economy | 24% | 25% | 21% | 22% | 25% | 24% | 30% | 26% | 26% |
Despite improving confidence in their own finances, consumers remain cautious ahead of the Autumn Budget. Nearly seven in 10 consumers (68 per cent) are concerned about its potential impact on their household finances, while 61 per cent are concerned about possible tax changes. Four in 10 (38 per cent) feel less sure than in previous years about the implications of the announcements that may be made.
This uncertainty is influencing household decision-making; a quarter (25 per cent) are reportedly building up a precautionary savings buffer, and 30 per cent say they’re reducing non-essential spending, while 27 per cent report delaying both major purchases and important financial decisions pre-Budget. Despite this, 61 per cent feel confident in their ability to make good financial decisions in uncertain times and 53 per cent feel in control of their finances, even in times of volatility.
Warm September weather boosts hospitality & leisure
Non-essential spending increased 1.8 per cent in September, with hospitality & leisure continuing its strong streak, up 2.7 per cent, following August’s 3.3 per cent growth. Within entertainment, up 1.5 per cent, cinemas, bowling alleys, and golf clubs all performed particularly well.
After the summer weather lasted throughout most of September, the overall eating & drinking category grew 2.4 per cent. Restaurants, cafes & bakeries were up 2.1 per cent, while bars, pubs & clubs enjoyed a 3.8 per cent boost, marking their fourth consecutive month of growth.
Growth in Hospitality & Leisure Spending | ||||
| June | July | August | September |
Hospitality & Leisure | 1.0% | 2.2% | 3.3% | 2.7% |
Entertainment | 0.2% | 2.0% | 5.9% | 1.5% |
Bars, Pubs & Clubs | 0.7% | 7.4% | 2.7% | 3.8% |
Restaurants, Cafes & Bakeries | 0.0% | 2.1% | 1.5% | 2.1% |
Digital content & subscriptions also saw a significant spike in spending, up 7.8 per cent, with transaction volumes up 4.2 per cent, thanks to the popularity of streaming hits like Slow Horses and The Gentlemen as half (47 per cent) of consumers said they were likely to spend Autumn nights in front of the TV.
Within retail, up 1.1 per cent overall, food & drink specialist stores (6.3 per cent), general retailers & marketplaces (4.4 per cent), and pharmacy, health & beauty (4.0 per cent) were among the month’s strongest performers.
Rohan Kumar, Head of Spend Insights at Barclays, said: “Spending maintained momentum in September, with growth across both essential and non-essential categories as confidence in household finances reached a seven-month high. Warmer weather supported another strong month for hospitality and leisure, while the rise in digital subscriptions suggests consumers are balancing socialising with autumn nights at home, even as pre-Budget uncertainty keeps value and careful decision-making front of mind.”
Overall Growth Figures
Spend Growth | Transaction Growth | |
Essential | 2.5% | 0.9% |
Non-Essential | 1.8% | 2.2% |
|
| |
OVERALL | 2.0% | 1.7% |
Retail | 1.1% | 1.9% |
Clothing | -1.3% | 3.8% |
Grocery | 0.0% | 1.0% |
| -0.8% | -0.3% |
| 6.3% | 8.2% |
Household | 1.2% | 5.1% |
| 1.2% | 0.5% |
| 1.0% | 10.7% |
| 1.0% | 2.9% |
| 3.5% | 1.4% |
General Retailers | 3.6% | 3.1% |
| 4.4% | 4.7% |
| -1.2% | -3.6% |
| 2.8% | -1.7% |
Specialist Retailers | 2.6% | 1.1% |
| 4.0% | -0.7% |
| -3.3% | -3.9% |
| 4.1% | 4.5% |
Hospitality & Leisure | 2.7% | 1.2% |
Digital Content & Subscriptions | 7.8% | 4.2% |
Eating & Drinking | 2.4% | -0.4% |
| 2.1% | -0.5% |
| 3.8% | 4.4% |
| 1.8% | -2.9% |
Entertainment | 1.5% | 6.6% |
Hotels, Resorts & Accommodation | 2.7% | 0.4% |
Travel | 2.0% | 1.1% |
| 3.2% | 5.5% |
| 2.2% | 0.4% |
| -0.8% | -0.8% |
| 1.7% | 4.0% |
Other | 3.4% | 2.3% |
Fuel | 17.3% | 1.9% |
Motoring | -4.1% | 4.2% |
Other Services | 0.4% | 1.3% |
Insperiences | 6.8% | 3.5% |
|
|
|
Online | 1.7% | 4.2% |
Source : Barclays
Image : shutterstock / 1137631598 / William Barton
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