The latest spend report from Barclaycard reveals that consumer spending climbed 3.8% in the first quarter of 2015, compared with the same period last year. Non-essential but nice-to-have experiences and items have seen the most significant uplift with spending on restaurants, entertainment and electronics increasing by 17% 11.9% and 6.6% respectively.
The Barclaycard Consumer Spending Report, which takes an in-depth look at consumer spending patterns and attitudes, finds that consumer confidence in the economy is rising, with almost half (45%) of Britons now feeling positive about the UK’s economic outlook, up from 38% at the end of 2014.
The impact of record low CPI inflation, salary rises and falling commodity prices are having an impact – three quarters (74%) are no longer worried about living within their means each month – 10%more than six months ago. A narrow majority (52%) also feels confident with their job security – up from 47% at the end of 2014.
As a result, almost half (47%) of consumers anticipate they will spend even more in the next few months, with 24% saying they ‘have been cautious for a long time’ and want to treat themselves for a change.
The leisure and electronic sectors are both set to see significant uplifts in consumer spending. One in 10 consumers (10%) say they are considering buying a smartwatch in 2015, exceeding current sales predictions. More than a quarter (27%) of consumers are planning days out to amusement parks, museums and aquariums in the coming months and 24% say they plan to visit more restaurants during the coming quarter.
However, next month’s General Election is causing some caution. The majority of consumers (56%) are concerned about its potential impact on their personal and household finances, no matter who wins. Almost one in five (19%) is planning to postpone major purchase decisions until the results of the election are known.
Chris Wood, managing director at Barclaycard, said: “Confidence in economic conditions is empowering consumers to begin to spend again on life’s little luxuries. As a result, in the first quarter of the year we see a significant uplift in consumer spending on dining out and electronic goods.
“Despite some caution around the upcoming General Election, this looks set to continue – one in ten people plan to treat themselves to a smartwatch in 2015, and households are already planning more days out together as the summer approaches. This is an encouraging start to 2015 for consumers and retailers alike.”
London is powering this growth in consumer spending with the largest year-on-year uplift in spending (4.9%), closely followed by the North West (4.1%) and West Midlands (3.6%). This is consistent with Barclaycard’s consumer confidence findings, which show that 64% of Londoners feel confident about spending more on non-discretionary items, as do 61% of consumers in the North West and 58% of those in the West Midlands.
Barclaycard processes over 40% of the 1.04bn retail credit and debit card transactions made in the UK every month, giving it unrivalled insight into how consumers across the country are spending.