Consumer card spending grew just 0.5% year-on-year in March – lower than February’s 1.0% growth and less than the latest CPIH inflation rate of 3.7% – as consumers prepared for rising bills and inflation on imported products.
The latest study by Barclays found consumers are feeling less confident in their household finances and continue to find ways to cut back on essential costs. However, the sunny weather did boost non-essential categories, during the month of March, with garden centres and food and drink specialist stores performing well.
Despite retail spend falling -0.2% in March (down from 0.6% growth in February), several subcategories outperformed in the month. Once again, pharmacy, health & beauty emerged as an outlier, up 11.0% – the category’s greatest increase since April 2022.
Garden centres rose 13.4% – the biggest spike seen since Barclays started tracking the category in January 2024 – and spending on home improvements & DIY moved into growth (0.9%) for the first time since June 2023.
This comes as a quarter of UK adults say they are intending to garden over the Easter Bank Holiday weekend, with 13% planning DIY, suggesting both categories will continue to perform strongly in April.
Karen Johnson, head of retail at Barclays, said: “Consumers are feeling the pressure of rising bills, alongside being mindful of the impact recent global events may have on their finances. In a bid to keep costs down, households are adopting more prudent budgeting , which has led to a resurgence of the ‘big weekly shop’.
“There are some welcome green shoots however, as the warmer weather and longer evenings encouraged consumers to invest time and money in gardening and DIY- a trend that looks set to continue in the run up to Easter.”
In light of recent events, two thirds of consumers are concerned that the products they buy from outside the UK will become more expensive. Meanwhile, 71% say they want to support UK businesses by buying more products that are “Made in Britain”. Some, 40% say they are looking for UK-made alternatives to products they currently buy that are produced abroad.
Research conducted between 08-11 April found that confidence in the UK economy dipped slightly month-on-month in March to 24% (down from 25%). In comparison, a smaller proportion reported feeling confident in the strength of the global and US economy, both at 20%.
“Following stronger than expected GDP growth in February, today’s data highlights the risks to consumer spending in the months ahead,” noted Jack Meaning, chief UK economist at Barclays.
“The impacts of heightened uncertainty and rising bills are already being felt. We expect spending to remain muted through mid-2025, before picking up into 2026 as interest rates easing starts to be felt and uncertainty begins to normalise.”
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