UK's consumer card spend increases by 1.2%, retail sales recovering

Spending on clothing increased 23.6 per cent month-on-month and 4.5 per cent year-on-year—the first uplift for the category in 2024, and its highest growth since July 2022—while department stores saw their greatest boost (5.5 per cent) since August 2023.

Non-essential spending saw its highest growth so far this year, at 2.7 per cent, as retailers’ discounting incentivised shoppers. Several retail sub-categories enjoyed a strong performance, such as clothing, health and beauty, and department stores, while entertainment spend increased by 14.4 per cent, according to the Barclays Consumer Spend report.

Seven in 10 (70 per cent) consumers are looking for ways to get more value from their weekly shop or reduce how much they spend, up from 66 per cent in August, and higher than the 67 per cent 2024 average. Of those seeking savings, half (47 per cent) are looking out for loyalty scheme discounts and deals, while 46 per cent are using vouchers or loyalty points to get money off their shopping. This comes as two-fifths (39 per cent) of Brits say they are trying ‘slow shopping’, by being more intentional and discerning with their purchases.

Overall retail spending rose 1.1 per cent in September compared to the same period last year – a marked improvement after the sector endured a challenging summer, as retailers’ discounting and promotional activity incentivised shoppers during back-to-school season.

In addition to being encouraged by markdowns, consumers are feeling more confident in their ability to spend on what matters most to them, with half (53 per cent) saying there are treats and luxury purchases they continue to buy, even when trying to budget.

Those prioritising new clothes and accessories (24 per cent) spend £73 (~$95.49), while beauty spenders (18 per cent) fork out £65 (~$85.03) each. This is reflected in the 8.9 per cent boost the category enjoyed in September—its highest growth this year—with recent Barclays Consumer Spend data showing that health and beauty has consistently outperformed broader non-essential spending since the start of 2023.

As Christmas products hit supermarket shelves, a quarter of Brits (23 per cent) anticipate that the upcoming festive season will be more expensive than last year. Cost-conscious Brits (15 per cent) have also started saving money for Christmas, with keeping an eye out for festive offers (26 per cent), and buying gifts in advance to spread costs (22 per cent) popular ways to reduce costs.

Karen Johnson, head of retail at Barclays, said: “Retail’s recovery emerged as a bright spot in September, despite there being colder weather and darker evenings on the horizon. While shoppers remain cost-conscious, it’s clear they’re responsive to retailers’ promotional activity. Discerning shoppers are also finding room for treats and little luxuries within their budget, demonstrating that consumers are prioritising spending on things that bring them joy. While many are anticipating a costly Christmas, there are encouraging signs that people feel confident in their ability to manage their household finances and take control of their festive spending.”

Fibre2Fashion News Desk (SG)