54% of consumers are cutting down on discretionary spending

Consumer research from Barclays has revealed that over half (54%) of consumers say they are cutting down on discretionary spending - especially on new clothes and accessories (63%) and eating out at restaurants (62%).

Overall spending in March grew just 4% year-on-year, less than half the latest CPIH inflation rate of 9.2%, as Brits made further cutbacks to cope with the cost-of-living crunch.

However, home improvement and DIY stores enjoyed month-on-month growth, while the latest season premieres of popular TV shows fuelled a rise in digital content and subscriptions.

Other figures from the latest Barclays report show that:

• Spending on groceries increased 7.1%, well below recent food price inflation figures (18.2%), as more than six in 10 find ways to reduce the cost of their weekly shop.
• Spending on utilities rose 39.3%, as the cold weather persisted into March and households kept their heating on.
• The specialist retailers’ category had its strongest performance since April 2022, up 3.5%, thanks to increased spending at florists and card shops for Mother’s Day (19 March 2023).
• Brits are demonstrating an encouraging return to traditional seasonal shopping trends as home improvement and DIY stores enjoyed a month-on-month rise of 4.3% in March, with more consumers starting to spruce up their homes and gardens in preparation for the warmer months.
• Digital content & subscriptions saw its highest growth since October 2022, thanks to the latest instalments of TV shows such as ‘Succession’ and ‘Ted Lasso’.
• Gen-Z consumers are spending more of their income on discretionary purchases compared to older age groups, including spending twice as much on takeaways.
• Just a third of Brits plan to pay for activities over the King’s Coronation bank holiday weekend in May, with only 8% planning nights out at bars and pubs.

Esme Harwood, Director at Barclays, said: “The below-inflation rise in grocery spending shows that Brits are still trying their hardest to shave money off their weekly shop, as energy bills continue to rise. Cutbacks are also impacting restaurants, with a number of cash-strapped consumers even avoiding social plans that involve meals out.

“Hospitality & leisure businesses will be hoping that the busy Bank Holiday period provides a boost to counteract consumers’ everyday cost-savings. While predictions for the Coronation weekend are lacklustre, the results from Mother’s Day are more encouraging, demonstrating that Brits are still taking advantage of one-off moments to go out and celebrate.”

The Barclays report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending.