Consumer spending slowed in October amid concerns over rising energy bills and Christmas costs

• Half of Brits are cutting back on discretionary purchases to help offset rising energy bills, while October’s unseasonably warm weather delayed new clothing purchases
• Essential spending growth tapered, impacted by easing food price inflation, cut-backs on grocery shopping and the reduced cost of some supermarket staples
• “Slack-filling” emerges as a new shrinkflation trend, as seven in 10 Brits notice products containing less of an item than suggested by the size of the packaging
• Pubs, bars & clubs had another strong month, boosted by the Rugby World Cup, while the travel sector benefitted from a rise in holiday bookings
• The Barclays report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending

Consumer card spending grew just 2.6 per cent year-on-year in October – noticeably less than the latest CPIH inflation rate of 6.3 per cent and the smallest uplift since September 2022 (1.8 per cent) – as Brits’ concern over rising energy bills and outgoing costs ahead of the festive period hindered discretionary spending. On a brighter note, the Rugby World Cup boosted pubs and bars for the second month running, while the travel sector performed well as holidaymakers booked getaways in the UK and abroad.

Spending on essential items saw a smaller increase (3.9 per cent) than last month (4.6 per cent). This was largely due to supermarkets (5.3 per cent) and specialist food and drink stores (5.9 per cent) seeing less of an uplift than in September (6.9 per cent and 8.0 per cent respectively), as food price inflation continued to fall and most consumers (69 per cent) continued to look for ways to reduce the cost of their weekly shop.

Of those seeking savings, 45 per cent are using vouchers or loyalty points to get money off shopping and 38 per cent are visiting multiple supermarkets to source a range of deals. A further 17 per cent are also choosing to buy products they see as more affordable, such as fresh foods that are in season as well as pre-prepared or processed foods, such as ready meals (11 per cent).

Shoppers on the lookout for “slack-filling”

A new shrinkflation trend has caught the attention of supermarket shoppers seeking to maximise the value of their grocery spending. Seven in 10 (70 per cent) have noticed that certain items often contain less of the actual product than suggested by the size of the packaging – a trend otherwise known as “slack-filling”. Crisps (65 per cent), sweets (43 per cent), biscuits (43 per cent), boxes of chocolate (42 per cent) and washing detergent (21 per cent) are the products most cited as being impacted by “slack-filling”.

Over two fifths (41 per cent) also report that some Christmas food and drink products appear to be smaller or weigh less despite costing the same or more than last year, namely boxes of chocolate (30 per cent), cheese (14 per cent), mince pies (12 per cent), and Christmas pudding and cake (both 11 per cent).

Yet amidst the cost of living crunch, many Brits recognise that supermarkets are trying to combat food price inflation, with over a third (36 per cent) noticing prices on supermarket staples have recently fallen, help budgets to stretch further.

Rain check on winter wardrobe purchases

Spending on non-essential items grew just 2.0 per cent in October – the smallest uplift since September 2022 (1.1 per cent) – as discretionary spending was reined in.

The unusually warm October weather also delayed sales of seasonal items such as winter coats and jumpers, contributing to the fourth consecutive monthly decline at clothing retailers (-3.0 per cent). Other categories impacted include “insperiences”, with spending on takeaways and fast food slower than last month (5.6 per cent versus 6.5 per cent in September) and digital content and subscriptions (4.9 per cent versus 7.7 per cent), despite some online entertainment platforms raising prices in October.

This comes as almost half (47 per cent) of consumers say they are planning to cut down on discretionary spending so they can afford their energy bills throughout the autumn and winter, with ordering takeaways (56 per cent), eating out at restaurants (56 per cent), and buying new clothes and accessories for day-to-day wear (50 per cent) among the most common cut-backs. 

On a more positive note, the Rugby World Cup continued to boost pubs, bars & clubs (up 5.9 per cent), as sports fans gathered to cheer on their respective teams. The travel sector (up 10.5 per cent) had another strong month, making it one of the best-performing categories in 2023. Travel agents (9.6 per cent) had their highest uplift since May (9.9 per cent), while hotels, resorts and accommodation saw 7.4 per cent growth.

“Bring Your Own Food (BYOF)” emerges as a budget-stretching hack

To save money during days out, seven in 10 Brits (71 per cent) say they now take food and drink from home, to avoid paying premium prices at venues where meals and snacks are often more expensive. Long car trips are the most common situation where Brits “BYOF”, followed by train journeys (30 per cent) and trips to the cinema (29 per cent).

Other popular destinations to “BYOF” include the office (27 per cent), theme parks (21 per cent), airports/flights (20 per cent), festivals (10 per cent) and festive winter markets (8 per cent). By bringing their own food and drink from home to these venues, Brits save an estimated £472.60 per person, per year.

Festive costs front of mind

Looking ahead, over a third (36 per cent) expect that this Christmas will be more expensive than in 2022, and a fifth (21 per cent) have concerns about keeping up with outgoing costs during the festive period. As a result of the rising cost-of-living, two fifths (37 per cent) expect they will spend less on Christmas gifts this year, while just 13 per cent anticipate spending more.

However, Brits are still looking for and finding economical ways to enjoy seasonal celebrations. Nearly one in five (18 per cent) has already started buying gifts to spread out the cost, while 14 per cent have spoken to loved ones to make a mutual agreement to cut back on gift-giving.

Esme Harwood, Director at Barclays, said: "Brits cut back on non-essential categories such as clothing and restaurants in October, as thoughts turned to saving for Christmas and budgeting for winter fuel bills. The unseasonably warm weather also hampered spending on indoor experiences, including digital streaming services and takeaways. However, pubs, bars & clubs still achieved strong growth, boosted by England’s performance at the Rugby World Cup, while the travel sector benefitted from a rise in holiday bookings.

"At the supermarket, value-for-money is still a priority, with consumers increasingly wary of "slack-filling", when a product’s packaging hides unnecessary empty space inside. On a brighter note, supermarkets are also being given credit for trying to keep prices down, with one in three noticing price cuts on everyday items."

Jack Meaning, Chief UK Economist at Barclays, said: “It looks as though the oomph continues to go out of squeezed UK consumers. The latest transaction data shows they are pulling back from discretionary spending and increasingly worried about their future ability to spend, adding to the picture painted by other data. Third-party consumer confidence data showed a significant drop in October, coming off the back retail sales contracting significantly in September. While some of these effects might be being amplified by unseasonal weather, it's hard to dismiss the growing evidence.”

Overall growth figures

Notes to editors

*CPIH: Consumer Prices Index including owner occupiers' housing costs

Established in 2014, Barclays issues a monthly press release commenting on consumer spending trends.

Across its issuing and acquiring businesses, Barclays sees nearly half of the nation’s credit and debit card transactions, which provides us with unique insight into UK consumer spending. This press release is based on consumer card spending data from Barclays’ issuing business – i.e. Barclays debit card and Barclaycard credit card transactions. It relates to the period 24^th September 2022 – 21^st October 2022. It is compared with the period 23^rd September 2023 – 20^th October 2023.

The consumer confidence survey in this press release was carried out between 20 - 24 October 2023 by Opinium Research on behalf of Barclays. There were 2,000 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.

For more information, please contact please contact Oliver Palca at oliver.palca@barclaycard.co.uk or Dee Fallon at deirdre.fallon@barclays.com

About Barclays

Barclays is a British universal bank. We are diversified by business, by different types of customer and client, and geography. Our businesses include consumer banking and payments operations around the world, as well as a top-tier, full service, global corporate and investment bank, all of which are supported by our service company which provides technology, operations and functional services across the Group. For further information about Barclays, please visit our website home.barclays.

About Barclays Market and Customer Insights

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