Consumer card spending rose 1.0% year-on-year in August, following two consecutive months of decline, with UK shoppers treating themselves to “affordable, mood-boosting luxuries” such as cosmetics even while tightening budgets.
The latest data from Barclays highlighted that non-essential spending bounced back in August, up 0.7%, thanks to the late arrival of barbecue and picnic weather – propping up butchers, delicatessens and garden centres.
Furthermore, the retail sector returned to growth for the first time since March this year, up 0.1%, with brick-and-mortar businesses witnessed the ongoing resurgence of instore shopping. The recent heatwave contributed to a return to the high street, with 55.7% of all credit and debit card spending in August conducted face-to-face (as opposed to online) – the highest level so far this year.
The retail sector also benefitted from an 8.0% increase in spending at garden centres – the category’s largest uplift so far in 2024 – as the drier and hotter weather across large parts of the UK encouraged Brits to invest more time and money sprucing up their outdoor spaces.
However, the sunshine has not had as much of an impact on clothing retailers, which saw only a mild improvement, declining by a marginal 1.7% compared to -2.3% cent in July.
Clothing remains one of the most common areas where discretionary spending is reined in – of the 46% of UK shoppers said they’re planning to make cutbacks, 53% noted they’ll spend less on clothing and accessories.
Karen Johnson, head of retail at Barclays, said: “The long-awaited British summer has unlocked pent-up demand across a number of retail categories, such as garden centres and butchers, as many Brits dusted off their barbecue for the first time this year.
“We’re also seeing an emerging trend of consumers indulging in retail therapy for mood-boosting pick-me-ups, often in the form of sweet treats and cosmetics. This is a much more immediate version of the long-running trend of consumers making room in their budgets for memorable experiences, like tickets for next year’s Oasis tour, which went on sale over the weekend.
“While cost-conscious shoppers continue to rein in discretionary spending to account for rising prices, especially in the run-up to Christmas, it’s encouraging to see that Brits are feeling noticeably more confident in their personal finances – a strong indicator of future spending as we approach the crucial festive period.”
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