Consumer card spending slowed to 7.4 per cent growth in January as Plan B restrictions and rising living costs hampered retail, hospitality and travel
- Spending on essential items grew 10.4 per cent, impacted by lower growth in fuel spending as Brits worked from home
- Despite rising prices, supermarket spending slowed to 13.6 per cent
- Specialist food and drink retailers saw an uplift of 67.3 per cent as Brits shopped locally due to work-from-home guidance and restarted meal box subscriptions
- Inflation is front of mind for the majority of UK adults, as nine in 10 say their household finances and discretionary spending are being impacted
- Expected boosts from Valentine’s Day, return-to-office, and growing international tourism may offset economic headwinds over the coming months
Consumer card spending rose 7.4 per cent in January compared to the same period in 2020 – the smallest uplift since April 2021 – as several sectors were hampered by Plan B restrictions, inflation, and rising energy costs. While these headwinds are likely to persist over the coming months, their near-term impact may be somewhat mitigated by anticipated uplifts from Valentine’s Day, growing inbound tourism, and Brits spending more on activities and experiences to lift their spirits during the winter months.
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew 10.4 per cent, the smallest rise in nine months. This can largely be attributed to fuel spend seeing its slowest rate of growth (6.7 per cent) since October 2021, as Plan B Covid restrictions throughout most of January meant Brits travelled less and worked from home instead of commuting.
Despite rising inflation, supermarket spending saw its smallest rise (13.6 per cent) since before the onset of the pandemic. One reason for the slow growth was consumers shifting their spending to food and drink specialist retailers (up 67.3 per cent), such as butchers, bakeries and recipe box services, as Brits chose to shop locally due to the work-from-home guidance and re-started meal kit subscriptions after the Christmas break.
Spending on non-essential items saw noticeably smaller growth in January (6.1 per cent) than in December (11.5 per cent), likely due to the combination of Plan B guidance, and the continued rise in the cost of living. This comes as nearly nine in 10 (89 per cent) Brits say they’re concerned about the impact of rising inflation on their household finances, while three in 10 (30 per cent) say they expect increasing household bills to affect the amount they spend on discretionary purchases.
With more Brits staying at home, face-to-face retail spending (excluding grocery) dropped -8.5 per cent, while spend on clothing (4.9 per cent) and sports and outdoor retailers (14.5 per cent) recorded a lower level of growth than in December (8.8 per cent and 22.0 per cent respectively).
The travel sector was also impacted by Plan B restrictions, with public transport seeing a steeper decline (-44.4 per cent) than last month (-28.1 per cent) as working from home guidance saw Brits delay their return to the office.
Overall hospitality and leisure spending also slipped into decline (-6.3 per cent) after five consecutive months of growth. Within that, the decline in restaurant spending continued to worsen (-17.5 per cent in January, compared to -14.1 per cent in December). Bars, pubs & clubs (14.9 per cent) also saw a smaller month-on-month uplift (up 21.2 per cent).
However, while hospitality and leisure declined overall, spending remained stable among both 16-24 and 25-34-year-olds (up 0.9 per cent and 0.5 per cent respectively), possibly due to younger consumers feeling less concerned about catching Covid-19, and being more comfortable with socialising.
Despite the ongoing economic headwinds, there are some bright spots on the horizon for retail, hospitality and leisure businesses. For example, a quarter of UK adults (25 per cent) say they are spending more on items and experiences to lift their spirits and stay motivated during the winter months, with 39 per cent of these Brits planning to eat and drink out more often. Similarly, 31 per cent feel confident that the vaccine booster rollout will lead them to increase their spending on socialising and shopping in-store.
Valentine’s Day should also give retailers and restaurants a further boost, as almost three in 10 (28 per cent) plan to celebrate the occasion, with this year’s budget set to increase from an average of £63 during lockdown in 2021, to an average of £77 this year. Those celebrating will be looking to spend this increased budget eating out at a restaurant (30 per cent) and buying a gift for their partner, such as chocolates or jewellery (29 per cent).
Meanwhile, the colder weather and Plan B guidance resulted in strong growth in ’insperiences’* (up 50.0 per cent) – this includes categories such as digital content, subscriptions and fast food, as consumers enjoyed nights in with a boxset and a takeaway.
January also saw DIY enthusiasts embark on home improvements as spending gathered momentum (up 22.3 per cent, compared to 21.5 per cent in December). Pharmacy and health & beauty retailers also remained strong (12.8 per cent) as shoppers invested in self-care to beat the January blues.
Jose Carvalho, Head of Consumer Products at Barclaycard, said: “January’s Covid restrictions, combined with the rise in the cost of living, clearly impacted consumer spending levels in January. While restaurants and bars, pubs & clubs were inevitably hampered by the ongoing pandemic, there are signs of brighter times ahead for hospitality as Brits say they’re planning to spend more on eating and drinking out to lift their spirits during the winter months.”
“The lifting of Plan B restrictions should also provide a welcome boost to many sectors, as workers travel back into the office and socialise over post-work drinks, while businesses will likely start to see the benefits of increased inbound tourism on retail sales too.”
| Spend Growth | Transaction Growth | |
| Essential | 10.4% | 6.2% |
| Non Essential | 6.1% | 15.2% |
| OVERALL | 7.4% | 11.5% |
| Retail | 16.2% | 10.6% |
| Clothing | 4.9% | -5.0% |
| Grocery | 17.4% | 10.9% |
| Supermarkets | 13.6% | 5.1% |
| Food & Drink Specialist | 67.3% | 64.3% |
| Household | 16.4% | 10.9% |
| Home Improvements & DIY | 22.3% | 13.2% |
| Electronics | 9.2% | 12.2% |
| Furniture Stores | 16.9% | 2.9% |
| General Retailers | 19.7% | 16.5% |
| General Retailers & Catalogues | 30.0% | 25.4% |
| Department Stores | -6.1% | -5.3% |
| Discount Stores | 20.7% | 7.4% |
| Specialist Retailers | 16.7% | 6.7% |
| Pharmacy, Health & Beauty | 12.8% | 2.2% |
| Sports & Outdoor | 14.5% | 2.9% |
| Other Specialist Retailers | 20.9% | 13.4% |
| Hospitality & Leisure | -6.3% | 12.9% |
| Digital Content & Subscription | 37.5% | 37.4% |
| Eating & Drinking | 26.1% | 17.3% |
| Restaurants | -17.5% | -27.8% |
| Bars, Pubs & Clubs | 14.9% | 21.9% |
| Takeaways and Fast Food | 64.9% | 31.6% |
| Other Food & Drink | 21.2% | 12.3% |
| Entertainment | -0.2% | 3.2% |
| Hotels, Resorts & Accomodation | -9.8% | -11.5% |
| Travel | -38.9% | -15.3% |
| Travel Agents | -41.7% | -39.7% |
| Airlines | -42.3% | -38.4% |
| Public Transport | -44.4% | -18.5% |
| Other Travel | -14.4% | 0.4% |
| Other | 3.7% | 11.4% |
| Fuel | 6.7% | 1.3% |
| Motoring | -5.3% | 15.5% |
| Other Services | 6.5% | 27.8% |
| Insperience | 50.0% | 35.2% |
| Online | 18.7% | 37.5% |
| F2F | -1.4% | 1.7% |
Notes to editors
*Barclaycard’s ‘insperience’ index tracks overall spending on at-home experiences, across different categories, such as digital content & subscriptions, takeaways & fast food, online food & drink specialists, and hobbies, crafts & collections.
We have changed the way we produce our monthly Consumer Spending Index. Starting in March 2021, all calculations moved to a two-year comparison (i.e. comparing January 2022 against January 2020), instead of a year-on-year comparison. This includes any prior period comparisons included in the release (e.g. comparing January 2020 to January 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 December 2021 to 21st January 2022. It is compared with 25th December 2019 to 21st January 2020.
The consumer confidence survey in this press release was carried out between 21st and 24th January 2022 by Opinium Research on behalf of Barclaycard. There were 2,001 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 Georgina Wilson at georgina.wilson1@barclays.com.
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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