Barclaycard: September consumer spending grew 13.3%, but shortages and inflation hampered Brits’ confidence

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Consumer card spending grew 13.3% in September compared to the same period in 2019, as Brits enjoyed the last of the summer sun. However, ongoing supply chain shortages and rising food and energy prices have hampered consumer confidence.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items increased 14.4% – the highest uplift in more than two years. This was driven by supermarket shopping (+14.7%), as well as a surge in demand at the pumps and climbing petrol and diesel prices, causing the sharpest growth in fuel spend in over 24 months (+11.1%). 

The ongoing shortage of HGV drivers is also making it more challenging for Brits to source some essentials in supermarkets and grocery stores. Almost half (46%) have reported seeing empty spaces on the shelves and 18% have found it harder than usual to find fresh fruit and vegetables. A further 13% have also found it difficult to purchase soft drinks, frozen goods and fresh fish and meat.

While spending on non-essential items grew 12.9% last month, the increase was slightly smaller than in August (+15.8%), which given rising inflation may also indicate that some consumers are starting to cut-back on discretionary purchases.

The number of Brits who felt confident in their ability to buy non-essential items fell four percentage points in September (59%, compared to 6 % in August) – the lowest this figure has been since February 2021, during the third national lockdown.

Consequently, some shoppers are already seeking out value in the purchases they make, as discount stores saw a 29.3% uplift compared to 2019. A further 56% of Brits suggest that if energy prices rise sharply, it will make it harder for them to spend money on nice-to-have items.

The rising cost of everyday items is also causing 90% of consumers to be concerned about the impact on their household finances, and in-turn those who feel optimistic about the economy has fallen month-on-month (31% in comparison to 37% in August).

However, many sectors also saw considerable growth in September, owing in part to workers returning to offices, the onset of a new school term and preparations for the winter months with home improvements and purchases of warmer clothing.

Pubs, bars & clubs benefited from a 43.5% boost as colleagues reunited at post-work gatherings, while entertainment saw its strongest growth in more than two years (+28.0%), with new film releases, gigs and theatre shows encouraging Brits back to venues.

Home improvements and DIY was up 24.1% and department stores and pharmacy, health and beauty retailers rose 3.6% and 17.5% respectively – the sharpest increases for both categories since May 2021.

Although still in decline, travel agents (-45.4%) and airlines (-49.5%) had month-on-month improvements (compared to -53.3 % and -53.0 % in August), as holidaymakers booked overseas trips to enjoy the end of summer.

Raheel Ahmed, head of consumer products, said: “The return of pupils and workers to schools and offices helped many sectors to see strong uplifts in September. Pubs, bars & clubs and the entertainment industry benefitted from post-work socialising, while international travel was given a boost as holidaymakers jetted off to warmer climes to squeeze in their last trips of summer.

“Consumers are, however, starting to feel the impact of rising prices on their personal finances, which is also hampering confidence levels. While this is causing some Brits to seek out value in their purchases, as the festive season approaches, we expect spending to gradually gather pace as shoppers start buying gifts and preparing for gatherings with loved ones.”