Consumer spending on ‘non-essentials’ increases
According to Barclaycard February 2018 saw increased sales of non-essentials, as consumers continued to prioritise their spending on the ‘experience economy’.
Data from the group also revealed supermarket spending (3.2%) returned to levels previously seen over the past six months, after a spike of 4.4% in January 2018.
Entertainment performed strongly at 8.6%. This was fueled by cinema and theatre spending rebounding from five months of contraction to rise 7.4% year-on-year, as Black Panther and the second release of tickets for the musical Hamilton boosted purchases at the box office.
Restaurants and pubs remained healthy at 9.7% and 10% growth respectively. Travel spending jumped 7.4% year-on-year – the highest level seen since December 2016, driven by a strong increase in airlines (6.8%). This growth could be set to continue as one in four consumers (25%) said they plan to spend more on holidays in the month to come.
However according to Barclaycard the mood amongst UK consumers remains subdued due to political uncertainty weighing heavily on consumers’ minds. March 2018 marks precisely one year before the UK is set to split with the EU. The group says that Brexit continues to be a cause for concern, with half of consumers (50%) worrying that the outcome of negotiations will leave them worse off than they are now – a rise of 4% compared to the month before.
Paul Lockstone, Managing Director at Barclaycard, said: “This is the third consecutive month that we’ve seen household spending growth above the prevailing rate of inflation suggesting that, while consumers remain cautious about their household finances, they continue to strike a balance between spending on essentials and on luxuries, whether that’s a holiday abroad or tickets for the latest blockbuster.
He added: “With a year to go before Brexit, consumers are cautious about the potential ramifications of whatever settlement the UK achieves, and half of us fear that the outcome will leave us worse off than we are now. As negotiations continue it’s likely that this will continue to weigh on sentiment.”
