Consumer spending grew 14.2 per cent in October | Barclays

• Spending on essential items saw a smaller uplift than September, as fuel spend returned to modest growth after last month’s surge
• Cinemas and digital content & subscriptions had strong growth, boosted by titles such as ‘No Time To Die’, ‘Squid Game’ and ‘Succession’
• International travel recorded its strongest post pandemic performance, as restrictions continued to lift
• Clothing and pubs, bars & clubs fared less well than last month, as concerns around rising household bills led Brits to cut back on nice-to-haves
• The Barclaycard report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending 

Despite the backdrop of inflation concerns and rising household bills, overall consumer card spending grew by 14.2 per cent in October, compared to the same period in 2019. While growth slowed in some non-essential categories, such as clothing and hospitality, it was a particularly good month for entertainment, digital subscriptions, and travel.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items increased 13.2 per cent – slightly less than September’s uplift of 14.4 per cent, as fuel spend returned to modest growth (5.5 per cent) after last month’s 11.1 per cent surge.

While shopping at supermarkets and food & drink specialist stores grew 14.2 per cent and 69.2 per cent respectively, almost four in 10 (38 per cent) consumers report finding it harder than normal to buy essential items due to shortages on the shelves – though this does represent an improvement on last month (46 per cent). The top five items among shoppers who were struggling to make some purchases were: fresh fruit and vegetables (42 per cent), ingredients for home cooking (30 per cent), frozen goods (28 per cent), fresh meat and fish (25 per cent) and soft drinks (24 per cent).

Spending on non-essential items rose 14.6 per cent, including a 127.1 per cent jump in online takeaway spend, as the colder weather led more Brits to order fast food via delivery apps.

The release of popular new series and boxsets such as ‘Squid Game’ and ‘Succession’ fuelled demand for sign-up services, with digital content & subscriptions rising 38.6 per cent, 7.1 per cent higher than last month’s growth (31.5 per cent).

In entertainment (up 28.4 per cent), spend on cinema bookings showed the highest level of growth (17.3 per cent) since October 2019 – largely due to the launch of the new James Bond film, ‘No Time to Die’. October also marked the first month that cinema spending crossed over into positive growth since the start of the pandemic.

There was also encouraging news for the travel sector – spending on international trips recorded its strongest performance since before the pandemic began, as restrictions continued to lift. Travel agents and airlines saw much smaller contractions of -26.9 per cent and -28.1 per cent compared to last month, when the categories declined by -45.4 per cent and -49.5 per cent respectively. Public transport also had its smallest drop (-20.0 per cent) since February 2020, as more workers returned to commuting by tube, train and bus.

However, in signs that shoppers may be cutting back on retail spending, some categories recorded smaller growth than last month, including clothing – which saw an 8.9 per cent increase compared to 10.1 per cent in September – and department stores, which fell back into decline (-3.1 per cent) after two months of growth.

This comes as almost nine in 10 (88 per cent) consumers say they are worried about the impact of rising inflation on their household finances – a minor improvement on September (90 per cent). A similar number (89 per cent) are concerned that rising bills will have a negative impact on their household finances, with 38 per cent of these Brits spending less on nice-to-have items.

In addition, three in 10 (29 per cent) of those concerned about rising household bills are cutting back on social events, including drinks and meals outs, which may explain why spending on bars, pubs & clubs (+37.1 per cent) saw a smaller rise this month than in September (+43.5 per cent), and restaurant spending had a larger decline (-8.3 per cent) than last month (-2.1 per cent).

Ongoing supply chain shortages continue to weigh on Brits’ minds, with over a third (34 per cent) being so concerned about shortages in stores that they are changing their approach to Christmas shopping this year.

In fact, over half (52 per cent) of these consumers are buying Christmas gifts earlier than usual, including toys and other child-related items, with online spend at these stores growing 38.4 per cent in October, compared to just 9.9 per cent in September. Meanwhile, close to three in 10 (28 per cent) are seeking to save money by buying gifts during the Black Friday or other seasonal sales.

Jose Carvalho, Head of Consumer Products, said: “The expensive festive period on the horizon, combined with ongoing concerns around the impact of inflation and supply chain shortages, has meant we’ve seen steady yet cautious spending from consumers in October.

“While the uncertainty around rising household bills appears to be weighing on Brits’ minds, the encouraging growth we’ve seen in entertainment and international travel shows that consumers are still keen to enjoy leisure activities and holidays. As the nation continues its Christmas shopping and gears up for Black Friday and other sales, we’re confident that November should bring some welcome cheer to retailers.” 

Notes to editors

We have changed the way we produce our monthly Consumer Spending Index. Starting in March, all calculations moved to a two-year comparison (i.e. comparing October 2021 against October 2019), instead of a year-on-year comparison. This includes any prior period comparisons included in the release (e.g. comparing July 2020 to July 2018), to ensure that all comparisons are like-for-like. This provides a more realistic view of the UK’s long-term recovery from the impact of coronavirus, and of whether spending has returned to pre-pandemic levels.  

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

Barclaycard sees nearly half of the nation’s credit and debit card transactions, which provides us with unique insight into UK consumer spending. The monthly spending data in this press release is based on Barclaycard credit card and Barclays debit card transactions, and is analysed by the Barclays Market and Customer Insights team. It relates to the period 25th September to 22nd October 2021. It is compared with 28th September to 25th October 2019.

The consumer confidence survey in this press release was carried out between 22nd and 25th October 2021 by Longitude Research on behalf of Barclaycard. 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 Stevenson at oliver.stevenson@barclaycard.co.uk  or on +44 (0)7880 184 177 or Rebecca Butler at rebecca.butler@barclaycard.co.uk or +44 (0)7881 318 767.

About Barclaycard

Barclaycard, part of Barclays Bank PLC, is a leading global payment business that helps consumers, retailers and businesses to make and take payments flexibly, and to access short-term credit. In the UK we process nearly £1 in every £3 spent using credit and debit cards, and in 2020 we processed over £267bn in transactions globally. We also partner with a wide range of organisations across the globe to offer their customers or members payment options and credit.

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About Barclays Market and Customer Insights

Barclays Market and Customer Insights helps businesses keep up to date with spending trends, monitors their market position and enhances their understanding of customer behaviour, based on actual customer spending. Visit insights.uk.barclays/MCI or email contact-MCI@barclays.com.