UK consumers continued to spend cautiously in March, but the latest Barclays Consumer Spend report suggests that apparel and core retail categories are proving more resilient than travel and big-ticket purchases, as shoppers prioritise essentials amid ongoing cost-of-living pressures.
Overall consumer card spending rose 0.9% year‑on‑year, lagging behind CPIH inflation of 3.4%, and non-essential spending slowed to 1.1%, with essential spending at 0.5% – returning to growth for the first time since July 2025. However, the overall retail growth of 1.6%, while modest, suggests reason for cautious optimism for retailers.
Fashion and beauty continue to attract spend
Some categories showed strong momentum. Clothing was a standout performer, up 3.6%, marking its strongest increase since July 2025. Clothing’s strong performance was driven by a 6.9% increase in transaction volumes, suggesting that consumers are still willing to refresh wardrobes in anticipation of warmer months ahead, despite a softening of confidence in the wider economy. The data suggests that shoppers are moving towards more frequent, lower‑value purchases as cost becomes an increasing priority.
Health & beauty continues to be a bright spot for retailers – growing by 6.3% – while digital also performed strongly. Spending on digital content and subscriptions surged 10.9%, reflecting consumers’ preference for at‑home entertainment and flexible subscription models that allow spending to be tightly controlled.
General retailers and marketplaces recorded growth of 4.4%, while specialist retailers outperformed at 5.0%, highlighting the ongoing shift towards curated and value‑led offers.
Grocery spending grew 0.8%, with food and drink specialists outperforming supermarkets. Specialists saw spend rise 4.1%, compared with 0.4% growth at supermarkets, highlighting a continuing shift towards convenience, premium and specialist food retailers.
Entertainment and experiences hold firm – but travel slips
Entertainment spending rose 3.5%, extending a 19‑month run of growth as transaction volumes jumped 7.2%. Cinema spending increased 5.5%, buoyed by high‑profile releases including Project Hail Mary = indicating that consumers are continuing to prioritise affordable social and leisure experiences, even while tightening belts.
Hospitality and leisure posted more modest growth of 0.9%, while eating and drinking out rose 1.5%. However, travel declined -3.3 per cent, as trips abroad were delayed or swapped for staycations.
Confidence remains despite economic headwinds
Although consumers’ confidence in the UK and global economy dipped in March, resilience is evident from the data. Barclays reports that the majority of UK adults say they are confident in their household finances (67%) and their ability to live within their means (71%).
Nonetheless, caution prevails. One in seven consumers (14%) reports delaying major purchases or building up savings, as the war in the Middle East rages on and the economic climate remains volatile. Rising food, energy and household bills are an ongoing concern, with 83% of consumers expecting inflationary pressures to persist throughout the rest of the year.
Jack Meaning, chief UK economist at Barclays, echoes that expectation. “With an interest rate decision due in less than three weeks’ time, the Bank of England will need to consider how to balance this softening economy with the inflation already taking effect,” he said. “Our modelling suggests this balance is best struck by holding rates, containing the worst of inflation without unduly squeezing consumers.”
Consumers reallocate their budgets
For retailers, the contrast between travel and retail spending is revealing – particularly when taken together with BDO High Street Sales Tracker data for March. While BDO’s High Street Sales Tracker highlights a sharp late‑month downturn and worsening conditions for store‑based retailers, particularly as confidence fell towards the end of March, Barclays’ transaction‑level data shows that consumer spend has not fallen away evenly. Instead, shoppers are increasingly reallocating their budgets away from big-ticket purchases, including holidays, towards clothing, beauty, entertainment and digital services that offer immediate value and flexibility.
This all points to a market that remains active but fragile. Although discretionary demand is still there, pressure is intensifying on volumes, margins and costs. For retailers looking to navigate the oncoming months – with no sign yet of an end to cost-of-living challenges – the Barclays and BDO data point to the need to balance value, relevance and affordable indulgence in order to capture consumer spend.
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