Consumer spending grew by just 1.5 percent in October, narrowly falling behind the current rate of inflation, as consumers remained cautious with their spending according to new data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, shows that essential spending grew slightly by 0.2 percent, bolstered by a 1.5 percent increase in supermarket expenditure.

However, essential spending was also impacted by a marked fall in fuel, which contracted by 3.9 percent year-on-year. This drop is a result of the record high petrol prices in October 2018*, with our data showing the number of transactions has remained relatively stable.

Non-essential expenditure saw a slightly stronger growth of 2.0 percent, yet the wet autumnal weather took its toll as over a fifth (22 percent) of consumers reported spending less than usual on leisure activities and evenings out. This impacted entertainment, which includes concert and theatre tickets, with the category declining by 3.0 percent. Clothing also dipped 0.3 percent in a sign of the ongoing challenges faced by retailers.

In contrast, fast food and takeaways benefited from 6.9 percent year-on-year growth. Although pubs and clubs did see an increase of 5.5 percent in October, this was down from 12.9 percent in September, reinforcing the wider data indicating that consumers opted to stay at home instead of going out.

It seems that UK adults are making a habit of carefully balancing their budgets as spending at discount stores grew by 7.7 per cent, with 61 per cent saying they are seeking value for money from their purchases.

This is perhaps why seven in ten (69 percent) feel confident in their household finances and in their ability to live within their means each month (74 percent). Yet retailers could be in for a challenging Christmas as less than half of consumers (47 percent) are confident that they will be able to spend as much as they normally do on festivities.

In parallel, overall consumer confidence remained low in October. Just three in ten (31 percent) consumers feel positive about the state of the UK economy, with the figure rising slightly to 37 percent of over 55s but dropping to a low of 25 percent among 34-54-year-olds.

The trend towards stockpiling continues, with 17 percent buying everyday items in case of potential shortages. Tinned goods top of the list, though household supplies – such as toilet roll – are becoming more popular to keep in reserve as 51 percent are now stocking up on bathroom and cleaning supplies, compared to 40 percent in September.

Esme Harwood, Director at Barclaycard, said “Ongoing economic uncertainty combined with a bleak start to autumn led many consumers to stay in rather than spend out last month, choosing takeaways and evenings at home over socialising at bars or restaurants.”

“As we head into the festive period, shoppers are also feeling cautious about their finances with many expecting to spend less than normal this Christmas. It’s likely we’ll see consumers continue to seek out value – whether that’s through buying more in discount stores or snapping up bargains in the Black Friday sales.”

Spend Growth Transaction Growth
Essential 0.2% 3.0%
Non Essential 2.0% 7.9%
OVERALL 1.5% 6.0%
Retail 1.8% 3.7%
Clothing -0.3% -0.9%
Grocery 1.7% 5.1%
     Supermarkets 1.5% 3.7%
     Food & Drink Specialist Stores 3.8% 16.8%
Household -0.6% 1.1%
     Home Improvements & DIY -3.2% -0.5%
     Electronic Stores 1.7% 1.5%
     Furniture Stores 1.5% 4.8%
General Retailers 5.6% 1.4%
     General Retailers and Catalogues 7.4% -1.0%
     Department Stores 0.1% 1.1%
     Discount Stores 7.7% 8.0%
Specialist Retailers 2.6% 4.8%
     Pharmacy, Health & Beauty 3.2% 2.9%
     Sports & Outdoor 2.6% 1.5%
     Other Specialist Retailers 1.9% 7.9%
Hospitality & Leisure 5.4% 9.4%
Eating & Drinking 6.3% 8.8%
     Restaurants 4.2% 8.3%
     Bars, Pubs & Clubs 5.5% 13.9%
     Takeaways and Fast Food 6.9% 4.0%
     Other Food & Drink 7.0% 10.6%
Entertainment -3.0% 9.6%
Hotels, Resorts & Accommodation 3.1% 6.1%
Travel 7.4% 11.3%
     Travel Agents 11.4% 4.2%
     Airlines 6.3% -3.2%
     Other Travel 4.1% 12.3%
Other -2.5% 8.2%
Digital Content & Subscriptions 8.3% 21.7%
Fuel -3.9% -0.4%
Motoring -1.3% 13.6%
Other Services -4.3% 3.8%
Online 4.9% 9.9%
F2F -0.8% 4.7%
Spend Transaction
Online as % of Total 42.1% 25.1%