Boost to consumer spend in September ahead of cautious winter, finds Barclaycard
Food sales, home improvements and the return to school have seen consumer spending jump 2% year-on-year in September – the largest uplift since February 2020. Data from Barclaycard indicates that spending on essential items grew 6.1% year-on-year, with supermarket spend jumping 15.4% as 27% of Britons admit to stockpiling tinned food and toilet roll.
Food sales, home improvements and the return to school have seen consumer spending jump 2% year-on-year in September
Painting a picture of the current consumer mindset
Britons have upped their spending on non-essential items by 0.6% as nesting consumers splurge on DIY (sales up 25.7%) and furniture (28%) to see them through the winter.
30% of people have embraced home improvements as an insurance policy against anticipated future lockdown restrictions and a greater amount of time spent indoors.
Cabin fever has worked to the high street's favour with bricks and mortar spend recovering from a 6.7% decline in August to post growth of 1.9% in September, as shoppers return to old ways.
Clothing spend witnessed a particularly pronounced bounceback, rising 4.2% in September versus 0.3% the previous month as consumers update their wardrobes for the colder months and prepared for the return of schools.
Holiday and hospitality spending
Spending across hotels, resorts and accommodation slumped 18.1% in September, a marked improvement on the -89.8% clocked up in May and comparable to the –19.1% seen in August, indicating that staycations are helping to offset a 63.1% collapse in travel.
Bars and pubs also reported an improvement, growing 9% in the month as 44% of pub-goers now feel less cautious in venturing down to their local. This is the first month the troubled sector has seen an increase in spending since February.
Restaurants meanwhile witnessed an 18.7% decline in spending, although this was still a significant improvement on the 39.1% decrease endured in August as restaurateurs offered discounts to tempt diners back.
The real beneficiary has been the fast-food sector, however, with spending on takeaways soaring 25.8%, the highest increase ever.
The bigger picture
24% of consumers are now more optimistic about the health of the UK economy, the most positive outlook since March and an improvement on the 19% figure recorded in August.
Individual confidence in household finances remains high at 70% although here the future isn’t quite so rosy with 34% fearing a hit to their finances over the next 12 months.
Raheel Ahmed, head of consumer products at Barclaycard, said: “Consumers made the most of the sunshine by socialising in September, with spending at pubs and bars seeing the first increase since before the national lockdown was introduced in March. There were also signs that many Brits squeezed in a last-minute summer holiday in the UK, as spending on accommodation stayed at similar levels seen in August.
On the flip side of the coin Ahmed cautions: “However, we also saw households preparing to spend more time inside as winter draws closer, with home improvement increasing as a result. While the nation’s confidence in the UK economy has improved slightly, many are still cautious about the upcoming winter months, and the subsequent uncertainty it may bring has caused some to start stockpiling once more.”
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