Despite the backdrop of inflation concerns and rising household bills, overall consumer card spending grew by 14.2% in October, compared to the same period in 2019. While growth slowed in some non-essential categories, such as clothing and hospitality, it was a particularly good month for entertainment, digital subscriptions, and travel.
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items increased 13.2% – slightly less than September’s uplift of 14.4%, as fuel spend returned to modest growth (5.5%) after last month’s 11.1% surge.
While shopping at supermarkets and food & drink specialist stores grew 14.2% and 69.2% respectively, almost four in 10 (38%) consumers report finding it harder than normal to buy essential items due to shortages on the shelves – though this does represent an improvement on last month (46%). The top five items among shoppers who were struggling to make some purchases were: fresh fruit and vegetables (42%), ingredients for home cooking (30%), frozen goods (28%), fresh meat and fish (25%) and soft drinks (24%).
Spending on non-essential items rose 14.6%, including a 127.1% jump in online takeaway spend, as the colder weather led more Brits to order fast food via delivery apps.
The release of popular new series and boxsets such as ‘Squid Game’ and ‘Succession’ fuelled demand for sign-up services, with digital content & subscriptions rising 38.6%, 7.1% higher than last month’s growth (31.5%).
In entertainment (up 28.4%), spend on cinema bookings showed the highest level of growth (17.3%) since October 2019 – largely due to the launch of the new James Bond film, ‘No Time to Die’. October also marked the first month that cinema spending crossed over into positive growth since the start of the pandemic.
There was also encouraging news for the travel sector – spending on international trips recorded its strongest performance since before the pandemic began, as restrictions continued to lift. Travel agents and airlines saw much smaller contractions of -26.9% and -28.1% compared to last month, when the categories declined by -45.4% and -49.5% respectively. Public transport also had its smallest drop (-20.0%) since February 2020, as more workers returned to commuting by tube, train and bus.
However, in signs that shoppers may be cutting back on retail spending, some categories recorded smaller growth than last month, including clothing – which saw an 8.9% increase compared to 10.1% in September – and department stores, which fell back into decline (-3.1%) after two months of growth.
This comes as almost nine in 10 (88%) consumers say they are worried about the impact of rising inflation on their household finances – a minor improvement on September (90%). A similar number (89%) are concerned that rising bills will have a negative impact on their household finances, with 38% of these Brits spending less on nice-to-have items.
In addition, three in 10 (29%) of those concerned about rising household bills are cutting back on social events, including drinks and meals outs, which may explain why spending on bars, pubs & clubs (+37.1%) saw a smaller rise this month than in September (+43.5%), and restaurant spending had a larger decline (-8.3%) than last month (-2.1%).
Ongoing supply chain shortages continue to weigh on Brits’ minds, with over a third (34%) being so concerned about shortages in stores that they are changing their approach to Christmas shopping this year.
In fact, over half (52%) of these consumers are buying Christmas gifts earlier than usual, including toys and other child-related items, with online spend at these stores growing 38.4% in October, compared to just 9.9% in September. Meanwhile, close to three in 10 (28%) are seeking to save money by buying gifts during the Black Friday or other seasonal sales.
Jose Carvalho, head of consumer products, said: “The expensive festive period on the horizon, combined with ongoing concerns around the impact of inflation and supply chain shortages, has meant we’ve seen steady yet cautious spending from consumers in October.
“While the uncertainty around rising household bills appears to be weighing on Brits’ minds, the encouraging growth we’ve seen in entertainment and international travel shows that consumers are still keen to enjoy leisure activities and holidays. As the nation continues its Christmas shopping and gears up for Black Friday and other sales, we’re confident that November should bring some welcome cheer to retailers.”