May consumer spending rises 9.3%, Barclaycard reveals

Consumer card spending grew 9.3% in May compared to the same period in 2021, inflated both by the rising cost of living and the “artificially” dampened demand last year due to travel and hospitality restrictions amid the pandemic. According to data from Barclaycard, spending on essential items rose 4.8%, and there was a 24.8% surge in fuel spending as petrol and diesel prices continued to climb. Spending on non-essential items grew 11.6% year-on-year, largely driven by hospitality and leisure spending, which increased “significantly” at 67.2%, compared to last year when the rule of six was still in place and indoor venues were only open for half of the month. However, shopping at supermarkets and specialist food and drink stores saw slight declines of -2.0% and -0.9% respectively, compared to May 2021. Barclaycard said it’s likely that more of the nation were cooking at home rather than eating and drinking out, due to the Covid measures still in place at the time. Additionally, Barclaycard found that over two fifths (41%) of consumers are now looking for ways to reduce the cost of their weekly shop, to adjust for rising living costs. Overall, many retail categories are reportedly not seeing the same demand as May 2021, when shoppers flocked back to stores following the reopening of non-essential retail in April, as well as the current impact of rising living costs on discretionary spending. Furniture stores (-25.4%) and sports and outdoor retailers (-19.6%) were two categories that saw “noticeable” year-on-year declines in May. Furniture stores were also down month-on-month (-3.1%). Sports and outdoor retailers, however, are trending upwards in the short-term, witnessing 4% growth month-on-month ahead of summer. Clothing retailers also saw growth compared to April (8.6%). However, rising living costs have meant that spending on digital content and subscriptions declined -5.7%. All in all, 21% said they are reviewing their subscriptions and cancelling any they can live without, with 18% of these Brits cancelling a TV or streaming service. José Carvalho, head of Consumer Products at Barclaycard, said: “The cost of living squeeze is clearly influencing discretionary spending habits, with figures showing a decline in subscriptions, and a drop in spending at restaurants, bars, pubs and clubs. Despite this, there are some encouraging signs, particularly in the travel industry. “While consumer confidence continues to fall, we hope to see at least a short-term boost thanks to the Jubilee Weekend, and the recently announced £400 energy bill discount coming in October.”

May consumer spending rises 9.3%, Barclaycard reveals

Furniture stores and sports and outdoor retailers were two categories that saw ‘noticeable’ year-on-year declines at -25.4% and -19.6% respectively

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