Economy

Consumer spending drops 26.7% year-on-year in May

Consumer spending contracted 26.7% year-on-year in May.

This is according to new data from Barclaycard, which revealed that spending on essential items grew slightly by 0.9%.

This was bolstered by a 24.5% rise in supermarket spend – which increased to 27% in the week preceding the VE Day weekend as Brits “made the most of the sunny bank holiday”. The upsurge in supermarket expenditure helped to offset a 49.7% fall in fuel.

However, spending on non-essentials decreased by 36.9% year-on-year, with department stores and clothing declining 44.5% and 42.4% respectively.

The drop was less steep than last month’s, which saw non-essential spend contract by 47.7%, reflecting a slightly more positive outlook for UK retailers ahead of some stores opening on 15 June.

Esme Harwood, director at Barclaycard, said: “While the restrictions continue to have a significant impact there are glimmers of hope. We are seeing certain sectors start to increase sales as the climate eases and they adapt.

“It may take some time to recover from the economic impact of coronavirus but household confidence remains high and there is a strong desire among consumers to support businesses.”

She added: “Other encouraging signs are also emerging. After weeks of isolating Brits are understandably keen to enjoy the great outdoors.

“There’s a positive shift for the cafes, pubs and restaurants beginning to open up again, as well as the retailers who stock essentials for barbecues and other socially distanced gatherings.”

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