Barclaycard: consumer card spending grew 17.7% in March as spring sunshine benefited some sectors

Card spending grew 17.7% in March compared to the same period in 2019, as Brits took advantage of the sunnier weather and lifting of all remaining Covid restrictions to visit pubs, dine out, and update their wardrobes in preparation for the months ahead. However, the cost of living is causing increasing concern for most UK adults, with travel plans and shopping preferences changing in response to rising fuel and food prices.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew 18.1% in March, the highest uplift since September 2021. This was largely driven by spend on fuel, which soared 26.1% as prices at the pump continued to climb.

In response to rising petrol and diesel prices, two fifths of drivers (41%) say they are changing the way they travel. Of these, over half (54%) are walking more often, almost two-fifths (38%) are cutting back on long car journeys, and 22% are opting to cycle instead.

Supermarkets saw a 16.9% jump – higher than the growth recorded in both January (15.5%) and February (16.0%) this year – likely due to inflation and rising food prices. Feeling the pinch, 58% of shoppers are looking for ways to stretch their weekly grocery budget; 52 % of this group are cutting down on luxuries, and 48% are switching from branded to budget or own-branded goods.

Many are also buying in bulk to offset increasing prices and guarantee availability. More than a third (35%) admit to stocking up on everyday items such as tinned and dried products (both 13%), household supplies (11%), and tea & coffee (10%).

Spending on essentials was also boosted by a demand for convenience and the popularity of local shopping, with food & drink specialist stores (e.g. butchers, bakeries and online meal-kit providers) up 76.9% compared to three years ago.

Despite the rising cost of living, Brits are still finding room in their budget for discretionary purchases, with non-essential spending up 17.5% compared to the same period in 2019. Hospitality and leisure saw particularly strong growth, rising 18.3%, boosted by a 41.7% surge in spending at bars, pubs and clubs, as the lifting of all remaining social distancing restrictions at the end of February encouraged Brits to flock back to beer gardens to enjoy the warmer weather.

Entertainment also enjoyed an uplift (20.3%), driven by cinema-goers watching major releases such as ‘The Batman’, while takeaways and fast food soared 79.6% compared to three years ago, reflecting a lockdown trend which has become a mainstay for many households.

The sunshine and a shift towards cycling in response to rising fuel prices may explain why shoppers spent more at both clothing and sports & outdoor retailers – up 10.1% and 18.8% respectively compared to 2019. One in five (18%) is also buying products in anticipation of an April heatwave, with 24% of sun-seekers purchasing spring or summer clothing, and 8% buying sports equipment.

In a sign that the staycation boom is set to continue, hotels, resorts & accommodation enjoyed a boost of 15.3% compared to the same period in 2019, as holidaymakers made plans to take trips and breaks across the UK.

Owing to the energy price cap increase on 1 April, over nine in 10 Brits (91%) feel concerned about the negative impact of rising household bills on their household finances – a two % increase on February and five % higher than in December.

The cost of living squeeze is also causing the majority to worry about the financial impact of wider international conflicts and sanctions, inflation, and rising energy bills (all 89%), as well as food prices (88%). This could explain why optimism about the future of the UK economy has fallen to 2 %, its lowest level since January last year (24%).  

However, despite this challenging backdrop, Brits’ confidence in their own household finances remains steady at 62%, as does confidence in their ability to spend within their means each month.

José Carvalho, head of consumer products at Barclaycard, said: “Many sectors saw strong growth in March compared to the same period in 2019, as sunnier weather encouraged Brits to socialise at pubs and bars, book staycations and update their wardrobes for spring and summer.

“However, rising fuel prices and household bills are clearly starting to influence consumer behaviour, with many Brits changing their travel and shopping habits to save money. While this may dampen growth in the months ahead, we shouldn’t overlook the expected heatwave later in April, and the fast-approaching Easter holidays, both of which are likely to boost non-essential spending.”