August consumer spending sees first uplift since February

Consumer spending grew 0.2% year-on-year in August – the first growth since February, 2020, with clothing spend up 0.3%, the first increase since March 2019, as shoppers took advantage of end-of-season sales, according to the latest figures from Barclaycard.

Spending on non-essential items contracted -1.6% – the smallest fall since the onset of lockdown – as the nation became more comfortable visiting stores. Spending at department stores also saw improvement, with the smallest drop, -3.6%, in the category since February, 2020.

As Brits enjoyed the last of summer by socialising and holidaying in the UK, spending on essentials grew 5.1%, largely driven by supermarket shopping which was up 14.9%, while the number of fuel transactions returned to similar levels seen last year, as people embarked on staycations and started returning to workplaces.

Spending at pubs and bars was a bright spot, with 9.3% growth in transactions – the first uplift since lockdown began, as punters socialised with friends and family.

Confidence in the UK economy fell to 19%, yet household confidence remained steady as holidaymakers postponed trips abroad and put the money into savings instead.

Despite a steady return to the high street, the data indicates the months of lockdown have accelerated a sustained shift towards online shopping. The highest category increases are seen across supermarkets, which showed a considerable 102.7% year-on-year rise as the popularity of online food orders prevailed, and online sales of clothing grew 24.3%.

Raheel Ahmed, head of consumer products at Barclaycard, said: “It’s encouraging to see the first uplift in spending after such a turbulent time for retailers. It seems the final throws of summer have spurred households to get out and about with clothing stores, pubs and bars welcoming growth for the first time since lockdown began. 

“However, despite the high-street showing some signs of recovery, challenging times still lay ahead in certain sectors. Months of lockdown has helped accelerate the trend towards digital, with surges in areas such as online ordering of takeaways and buying groceries online meaning the road to recovery may still be a long one for bricks-and-mortar stores.

“Retailers may take reassurance from the fact that household confidence remains steady and, of course, the restaurant sector also benefitted from the boost provided by the ‘Eat Out To Help Out Scheme’. As this discount comes to an end, and the lure of pub gardens slips away with the sunshine, we will see the resilience of businesses truly tested as we head into autumn.”