UK consumers prioritise beauty despite financial pressures, Barclays report finds

New data reveals that UK consumers now view beauty, entertainment and travel as "non-negotiables", even as they become more budget-conscious and adopt smarter spending habits.

That's according to the Barclays '10 Years of Spend' report, which analyses insights dating back to 2015, tracking consumer and economic confidence alongside proprietary transaction data.

It reveals the key trends that have defined behaviour and spending patterns over the last decade while providing an outlook for the years ahead.

As part of this, confidence in household finances has remained more resilient than confidence in the wider UK economy, which continues to be impacted by macro shocks in the last decade.

It comes as 66% of consumers report paying more attention to their budgets than they did a decade ago, while 45% say they don’t feel any better off financially.

At the same time, 82% express concern about "shrinkflation", reflecting a growing awareness of pricing tactics and value for money.

Jack Meaning, Chief UK Economist at Barclays, said: "We often get caught up in analysing the current moment, especially in light of the major economic shocks and gyrations of recent months. However, this report reminds us of the importance of taking a step back, providing a view of the bigger picture over the last decade.

"Recent trade developments are not the only headwind that UK consumers have weathered recently. The global outlook remains weak, uncertainty continues, and expectations for the year ahead are muted. But this data shows that consumers and their spending patterns have always evolved in response to macro shocks, and will likely do so again."

Despite pressure on household budgets, the data suggests consumers have become increasingly resourceful in managing rising costs while preserving the quality of life they value. Between 2021 and 2024, discretionary spending grew at an average annual rate of 9.2%, significantly outpacing the 5% growth in essential spending.

It also shows that 24% of consumers prioritise enjoyment and creating memories, valuing experiences more than material goods. Meanwhile, the hospitality and leisure sector has experienced steady growth since April 2021, when socialising resumed following the lifting of lockdown measures and the reopening of outdoor venues and indoor leisure facilities.

Entertainment and travel both outperformed retail subcategories in recent years, with the exception of beauty, which has continued to go from strength-to-strength. All three are among the strongest performing non-essential categories post-pandemic.

The report also reveals that spend on digital content and subscriptions has increased 47.5% since January 2020. Additionally, 88% are now signed up to at least one subscription, and for those with subscriptions, the average monthly spend on these services is £50.60.

Karen Johnson, Head of Retail at Barclays, said: "Ten years’ worth of analysis tells us that while confidence in the UK economy has declined, UK households’ confidence in their ability to manage their money has remained strong, translating into the impressive performance of categories such as travel, entertainment and beauty.

"The last decade has brought unprecedented levels of disruption. Amid all the highs and lows – from rising bills, job insecurity and a fluctuating global and national economy. It is encouraging to see that through purposeful spending, consumers continue to prioritise the things that bring them joy, unlocking the potential for UK economic growth."

William Higham, Consumer Futurist, added: "It’s often assumed that in uncertain times practicality becomes more of a priority. Instead, it’s usually values and emotions which steer our choices. This ‘Seesaw Spending’ means functional purchases often take a back seat in favour of fun, joy and the things and people that matter most to us, a trend set to continue for some time.

"Global instability also means that consumer behaviour has become less predictable. Businesses need to accept, or even embrace, constant change as the ‘new normal’. Success will come from adapting quickly as cultural shifts arise while being prepared to withstand or exploit whatever the world throws their way."