For the last 10 years, Barclays has been carefully monitoring how UK consumers are spending their money and how those habits have changed over time.
Each month, Barclays publishes its “Consumer Spend Report,” which combines credit and debit card transaction data with a monthly consumer sentiment survey. Using this array of metrics and analysis, we can build a comprehensive picture of the spending habits and macro trends that are underpinning confidence in the UK economy.
As well as tracking the fluctuations in spending that characterise each month, our survey data, which is gathered and collated by Opinium Research, gives us the ability to track how people are feeling about both the present day and the weeks and months ahead, providing us with an outlook, covering financial concerns, priorities and decisions.
Based on their responses, we can build a picture of household finances and gain insights into how consumers view the UK’s economic picture. We can track whether consumers are feeling optimistic about their own financial situation, or the UK’s finances more generally. On a more granular level, we can get a sense of whether they’re putting money aside with the aim of making a bigger purchase, and what is on their minds in the build-up to big seasonal spending events, like Christmas and Black Friday.
Barclays’ clients can access and utilise this data. Using our reporting platforms, businesses can react to a spike in transactions, analyse sales data to track peaks and troughs, and act quickly when new opportunities arise.
As well as that, we offer core insights, that can be provided as daily, weekly, and monthly data, in standardised templates, giving clients insights into year-on-year trends.
We also track macro trends, both transient and long-lasting. We can see how confidence in the UK, European, and global economy has fluctuated, including historic lows during nationwide lockdowns as well as the shifts caused by political interventions and general elections.
Confidence in non-essential spending: An enduring trend
One of our core findings that has rarely wavered over the last decade is confidence in consumers’ ability to purchase non-essential items. We define non-essential spending as goods and services that you do not need to maintain basic living standards, and it typically refers to categories like travel, entertainment, health, and beauty.
The figure has never fallen below 40 per cent among UK consumers, even during the Covid-19 pandemic. It has averaged above 50 per cent during the last decade, has consistently stayed about that level since March of 2023. Despite this, confidence has not always translated into an increase in overall spending. Growth is often sluggish and increased just 1.9 per cent overall in 2024.
As a potential explanation of this trend, the figures suggest that consumers are prioritising savings goals and have been successful in meeting them. Across 2024, growth in essential spending slowed to 0.9 per cent, down from 3.9 per cent in 2023. These figures can partly be explained by a fall in petrol prices, but it also showed that consumers are finding ways to make smart choices at the supermarket and cut the cost of their weekly shop.
Explaining this trend, Karen Johnson, Head of Retail at Barclays, said: “Over the last two years, we have seen shoppers consistently getting savvier and minimising the cost of their weekly shop. People are finding to find ways to enjoy life’s little luxuries, while putting aside money for purchases they really want.”
Three trends set to define consumer spending in 2025
1. The lipstick effect
In an era where consumers are increasingly cost-conscious, particularly when it comes to buying their weekly essentials, they have not taken the same approach to their spending on health, beauty, and pharmaceutical products.
Nicknamed ‘The lipstick effect’, Barclays profiled the increase in health and beauty spending in detail last year, showing that half (46 per cent) of consumers now consider health and beauty products to be essential purchases to them, with 23 per cent of consumers saying that they had cut back on new clothing and accessories, so that they could spend more on these products.
The beauty sector has proven time and time again to be retail’s shining subcategory, across all of 2024, spending at pharmacy, health and beauty retailers increased 7.1 per cent, and it’s on track to continue to grow in 2025.
2. The resurgence of travel
After a torrid time during the Covid-19 pandemic, when the travel industry was effectively ground to a halt, consumers firmly caught the travel bug again in 2024 and ranked holidays first in a list of discretionary spending priorities.
Travel spend was strong last year, up 6.9 per cent. Spending while on holiday is increasing too; 37 per cent of consumers say that when they go on holiday, they tend to spend more than they had planned to.
There’s nothing suggesting travel spending will slow down this year, and recent Barclays research shows three in 10 consumers (28%) have booked a 2025 getaway.
3. Prioritising the big events
The live entertainment industry was also decimated by the pandemic, with venues, festival fields and theatres all forced to close their doors.
However, in 2024, it saw a huge resurgence, with a 5.8 per cent uplift year-on-year versus 2023. We can partly attribute this rise to big events like Taylor Swift’s Eras Tour, which gripped cities across the UK during its run, and the announcement of huge arena and stadium tours from the likes of Coldplay, Lana Del Rey, Dua Lipa and Billie Eilish.
And, of course, things reached a high in September when the unexpected Oasis reunion saw millions of fans rush to buy tickets for their tour, which will roll through stadiums this summer. With Beyonce, Sam Fender, Guns n’ Roses and Kendrick Lamar all planning major 2025 UK tours, there’s no reason to imagine this growth will slow.
How Barclays makes its calculations and where our data comes from
Barclays has a long-established track record in the monitoring and analysis of the UK’s consumer spend trends and has been publishing regular updates since 2014. Our reports are some of the most robust, reliable, and up-to-date sources of consumer spending data available.
From our card issuing and payments processing businesses, we can see almost 40 per cent of the nation’s credit and debit card transactions, which provides us with a unique view of how UK consumers are spending their money, how those habits are changing and how they compare to years gone by.
To build a more complete picture of UK consumer confidence, this analysis is then combined with consumer sentiment research, which captures the nation’s confidence in the strength of UK, European and global economies, alongside the health of personal and household finances. To do this, we work with Opinium Research, who act on behalf of Barclays. Each month, they carry out a survey with responses from 2,000 consumers, who provide a representative sample by age, gender, region, and income group.
By bringing together a wealth of survey responses, alongside almost half of the nation’s credit and debit card transactions, we are able track, measure and analyse the spending habits of UK consumers.
To find out more about Barclays’ Market & Customer Insights, click here.
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