Consumer card spending in UK up 4.3% YoY in Apr 2023

Clothing remained in decline at -2.3 per cent for the third month in a row. This is likely because new clothes and accessories and eating out at restaurants are the most popular areas for cutbacks—both 60 per cent—by Brits who are reducing their discretionary spending in to cope with rising household bills at 55 per cent, according to a report titled The Barclays Consumer Spending Index.

Popular money saving methods adopted by UK shoppers include buying discounted products nearing expiration, aka ‘yellow sticker’ items at 38 per cent, and using vouchers or loyalty points to get money off at the checkout at 37 per cent. In addition, almost seven in 10 or 69 per cent have been making product ‘swaps’ to save money recently, with over a quarter or 27 per cent shifting from supermarket own-brand premium ranges to standard or value ranges.

Spending on fuel dropped 9.3 per cent, due to falling petrol and diesel prices, especially compared to April 2022, when they were much higher due to the Russian invasion of Ukraine.

Spending on utilities saw less of a YoY uplift at 34.4 per cent compared to March at 39.3 per cent, largely due to the energy price cap increase in April 2022. A year on from this energy price hike, Brits’ concern around the impact of rising household bills remains high at 90 per cent, leading 55 per cent of Brits to reduce their discretionary spending to cope with the squeeze.

Despite this, spending on non-essential items saw higher YoY growth in April at 4.6 per cent than in March at 3.5 per cent, as the Easter weekend and arrival of spring encouraged more Brits to enjoy social and outdoor activities. This led to a return to growth for sports and outdoor retailers, which was 0.6 per cent in April vs -4.5 per cent in March.

Consumers are feeling noticeably more confident in their household finances and ability to spend on non-essential items at 67 per cent and 56 per cent, respectively, compared to last month at 59 per cent and 48 per cent, respectively. Meanwhile, Brits’ optimism in the future of the UK economy has also increased to 25 per cent, up two percentage points on March.

“High inflation continues to squeeze real household disposable incomes and constrain consumption. However, this has been somewhat offset by the decline in wholesale energy prices and the extension of the Energy Price Guarantee, which are contributing to an improvement in consumer confidence,” said Abbas Khan, UK economist at Barclays.

Fibre2Fashion News Desk (NB)