Consumer spending slows in September as 9 in 10 Brits “concerned over household bills”

Consumer card spending grew 1.8% year-on-year in September 2022 – the smallest uplift since February 2021, as Brits cut back on discretionary purchases in response to rising living costs.

Nine in 10 consumers are concerned about household bills, with average spending on utilities up 48% year-on-year.

After falling into a decline of -1.9% in August 2022 compared to August 2021, clothing retailers saw an even sharper drop in September of -4.1%, according to the latest data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions.

Over half of consumers (53%) say they are planning to cut down on discretionary spending so they can afford their energy bills throughout the autumn and winter, with the 59% of Brits in that group cutting back on buying new clothes and accessories, and 60% cutting back on eating out in restaurants.

Combined with the arrival of autumn, Brits are spending more time enjoying evenings at home to save money, resulting in a boost for at-home categories and “insperiences”, including digital content and takeaways.

Over two thirds (67%) of Brits say they are looking for ways to reduce the cost of their weekly shop. Of those shoppers, 43% are paying closer attention to the prices of items they buy regularly, 40% are cutting down on luxuries or one-off treats for themselves, and 36% are purchasing own-brand or value ranges in supermarkets.

Esme Harwood, Director at Barclaycard, said: “Energy price increases are understandably causing concern for Brits, as they worry whether they will have enough money to cover their household bills. Consumers are taking a savvy approach to budgeting as they reduce spending on discretionary items and seek more value in their weekly shop, which is having a knock-on effect on retail and hospitality sectors.

“However, Brits are also looking for ways to enjoy themselves at home while saving money, which has led to growth across “insperience” categories such as digital subscriptions and takeaways. It is likely to remain a challenging time for many other sectors as consumers focus on essential spending and businesses continue to navigate inflationary headwinds.”

Makala Green, financial expert and author of the new Barclaycard report, added: “To ensure consumers can manage their budgets during this challenging time many will be weighing up whether they can afford certain nice-to-have purchases and experiences, such as buying new clothes or going out to eat. Categories like restaurants, pubs and clothing retailers are already seeing a decline in demand, as consumers focus on keeping cash in their pockets to cover essentials such as energy bills and weekly shopping.

“As the busy festive shopping period approaches, and the impact of rising energy bills starts to take effect, cost-saving behaviours will become even more crucial as Brits look to keep their finances in check.”

Despite ongoing inflationary pressures, confidence in household finances remained steady at 59% in September compared to 60% in August, though that is a notable decline from the level of confidence two months ago, which was 66%, and an even steeper drop compared to a year ago, when it was 68%.

The consumer confidence survey was carried out between 23-26 September 2022 by Opinium Research on behalf of Barclaycard. There were 2,001 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.