Consumer spending growth hits highest level in four years, up 3.9% in 2015, Barclaycard reports

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Consumer spending grew 3.9% in the year to the end of November, as negligible inflation combined with higher employment and the highest wage growth in six years to give British households greater disposable income.

According to the annual analysis of UK consumer spending by Barclaycard, which processes nearly half of all credit and debit card transactions in the UK, the entertainment and travel sectors saw the strongest levels of growth for the third year running in 2015, as households spent the extra money in their pockets on more meals out, family holidays and trips to the pub.

Non-essential spending grows

Entertainment and travel spending saw the biggest increases in spending for the second year in a row, up 11.4% and 7.5% respectively as consumers spent 6.0% more on non-essentials.

Spending on entertainment – which includes pubs, restaurants, cinemas, concerts and most leisure activities – saw record annual growth, driven by a 14.4% increase in restaurant spending and by 9.7% more being spent in pubs compared to last year thanks to the Rugby World Cup and Andy Murray leading Great Britain to their first Davis Cup title since 1936.

Cinema spending spiked around the launches of the year’s biggest films: Spectre, Fast & Furious 7 and Jurassic World. Spectre had the biggest impact with spending up by 94% in the three-week period around the launch, followed by increased spending on the seventh instalment in the Fast and the Furious franchise (up 68%), and Jurassic World (up 63%). An eagerness to see the latest Bond movie meant cinema sales were up 87% in the week prior to Spectre’s launch alone, thanks to fans booking ahead.

Spending on essentials slows

Clothing and food and drink – which includes supermarkets, grocery stores and off licences – saw spending growth slip slightly as households benefitted from lower prices in these categories, and consumers retained their habit of ‘penny-pinching’ to save on essentials wherever they can.

Spending on food and drink was the weakest performer of all the spend categories for the second-year running, growing just 1.1% – down from 2.1% last year. It was hit by supermarket spending growth falling from 1.8 per cent in 2014 to just 0.6% year-on-year. Structural changes in shoppers’ behaviours – from a large weekly shop to smaller, more frequent visits, and greater use of discounters – continued to impact the sector. A 5.5% fall in the amount spent per supermarket shop offset a 6.4% increase in the number of supermarket purchases.

A near-halving in electronics spending from 6.4% to 3.5% came despite the launch of a slew of must-have electronics devices including the iPhone 6S and Samsung Galaxy 6. Many shoppers upgraded their devices last year and so cut back their spending on gadgets and tech in 2015.

In a nod to the on-going importance of fiscal frugality to consumers, spending in discount stores grew by 12%, and the overall amount spent per transaction across all categories is down by 4.1% this year, despite the number of transactions being up by 8.3%. Shopping around has seen more purchases being made, but at a lower value.

Chris Wood, chief operating officer of Barclaycard, said: “Alongside the impact of working population growth and higher wages giving households a bit more money to spend, the falling cost of filling the car and feeding the family have cut them a little more slack this year and allowed consumers to live a bit more for the ‘here and now’.

“Consequently, spend growth has been above three per cent each quarter this year for the first time since Barclaycard began tracking it in 2011, and we’ve seen record spending growth on entertainment and travel. Households have adjusted the dial on balancing their desire to save money with treating themselves.

“Fiscal responsibility remains, however, as shown by the double-digit growth for the second-year running at discount stores and a further shift from in-store spending to online where consumers have more choice and find it easier to compare prices, and we expect it will do so for some time to come.”

Spending in detail in 2015 (2014 figures in brackets)

Level of spending growth Change in volume of transactions
(no. of purchases)
Change in amount spent per transaction
Total retail spending 3.9% (3.3%) 8.3% (7.4%) -4.1% (-3.7%)
Core categories
Clothing 4.0% 3.7% 0.2%
Entertainment 11.4% 19.3% -6.7%
Food & Drink 1.1% 6.8% -5.4%
Household 4.2% 3.9% 0.3%
Travel 7.5% 27.5% -15.6%
Detailed categories      
Airlines 4.1% 7.6% -3.2%
Cinema and Theatre 3.2% 11.6% -7.6%
Department stores 6.9% 10.1% -3.0%
Discount stores 12.0% 17.9% -5.0%
DIY stores 2.8% 2.8% 0.0%
Electronic stores 3.5% 4.4% -0.8%
Family clothing 2.9% 2.7% 0.2%
Furniture stores 6.0% 2.8% 3.0%
Garden centres 4.0% 3.8% 0.2%
Hotels 6.9% 10.6% -3.3%
Men’s clothing 13.9% 17.9% -3.4%
Petrol -11.1% -2.3% -9.0%
Pubs 9.7% 12.4% -2.4%
Restaurants 14.4% 21.1% -5.6%
Supermarkets 0.6% 6.4% -5.5%
Women’s clothing 5.4% 4.5% 0.8%
Online 13.8% 13.5% 0.2%
In-store 1.2% 7.2% -5.6%
Essential -2.1% 5.0% -6.8%
Non-essential 6.0% 10.6% -4.2%