Shoppers shake off austerity and part more readily with money, reports Barclaycard


UK consumer spending in September 2013 remained well above the rate of inflation for the sixth month in a row, driven in part by strong retail spend as families continued to feel more positive about the future, according to the latest monthly analysis by Barclaycard.

Barclaycard, which processes nearly half of all card transactions in the UK, found restaurant spend performed particularly well in September, with growth of 11.2% – the strongest recorded this year – and much higher than the growth seen a year ago (September 2012: 5.3%) as families made the most of the mild start to autumn and ate out more. However, the average amount spent was down (-6.3%), suggesting they ate out more but spent less each time.

Online clothing spend performed particularly well in September, as consumers updated their wardrobes for autumn and sought out the latest fashions online in advance of them hitting the high street. Men’s and women’s clothing were up 38.0% and 36.1% respectively.

The rebounding housing market contributed to spend on DIY increasing by 5.8%, but garden centre spend dropped with the temperatures, declining 2.2% – the first time it witnessed negative growth since March. With spend up 11% on average from April through to August it appears consumers spent on their garden in the early part of the summer.

And the shift from driving to cheaper public transport continued; with spend on petrol dipping into the red (-2.1%) after seeing three months of positive growth, whereas spending on public transportation grew 4.8% on last September.

Consumers hunt the best bargains – shopping little and often

As consumers remain determined to get the best value for their shopping, a new trend of ‘little and often’ could see an end to the weekly shop. The average transaction value for supermarket spending in September fell 5.2%, whilst the number of transactions was up 4.8% year-on-year suggesting instead of doing their supermarket shopping all in one go, value-seeking Brits are hunting down the best bargains by visiting a number of different shops.

Overall supermarket spending for the month fell slightly (-0.7%), despite higher food inflation (4.1% in August) pushing prices up.

Entertainment and travel spend

Strong restaurant growth bucked the trend in overall declining travel and entertainment spend, as Brits tighten their purse strings in the run up to Christmas. Cinema and theatre spend fell by -0.7% year-on-year, and hotel spend grew by just 2.4%, both of which were the lowest readings so far in 2013.

Airline spend also slowed from its double-digit growth and dipped into negative territory (-0.3%) for the first time since the beginning of 2012. However the number of airline transactions grew 6.6% compared to last September, indicating falling ticket prices was to blame for the drop in spend growth, suggesting  travellers are holding out for cheaper airline tickets, rather than cancelling trips completely.

In-store spending by category

Restaurants                           +11.2%
Auto Parts & Accessories        +7.8%
DIY Stores                            +5.8%
Public Transportation           +4.8%
Family Clothing                     +2.5%
Furniture Stores                   +2.4%

Garden Centres                   -2.2%
Petrol                                   -2.1%
Department Stores              -1.1%
Cinema/Theatre                   -0.7%
Supermarkets                       -0.7%
Airline                                   -0.3%

Val Soranno Keating, chief executive of Barclaycard, said: “Consumer spending was up again in September, growing 3.0% year-on-year and out-pacing inflation for the sixth month in a row. Shoppers are spending more but they remain cautious and we’re seeing them make smart choices to stretch the household budget – using public transport instead of the car, eating out more but spending less each visit, and shopping around supermarkets to take advantage of the best offers.

“There’s been a lot of debate over the scale of the economic recovery and whilst we’re not quite out of the woods yet, the fact that consumer confidence is at a six-year high, economic growth is up, and spending continues to grow, clearly shows that we’re on the right path.”

Online vs. offline spend

Online spend grew by 6.7% – the third consecutive month that we see single-digit online growth – and its share of total spend grew 0.7% to 20.0%, compared to September 2012 (19.3%).

The good weather continued to help high-street footfall; in-store spend grew at a healthy rate of 2.2%, albeit a slower rate than seen since June.

Men’s Clothing  +38.0%
Women’s Clothing        +36.1%
Furniture Stores        +34.5%
DIY Stores                            +19.3%
Department Stores       +16.7%

Regional spend

Yorkshire & the Humber and the East Midlands saw the strongest year-on-year spend growth (4.0%) of the 12 UK regions. Scotland, with spend growth of 2.1%, continued to lag behind.

UK Regions
Yorkshire Humber        +4.0%
East Midlands   +4.0%
Northern Ireland        +3.7%
North West                           +3.6%
North East                           +3.5%
London                       +3.4%
East of England +3.4%
South East                           +2.9%
South West                           +2.8%
Wales                        +2.4%
West Midlands   +2.2%
Scotland                             +2.1%