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A woman looking at her just delivered parcel. Spending on takeaway were up by 7.7% in May 2022.

UK Consumer Spending Report

August key insights

It is particularly interesting to see how consumers have finally reverted back to their pre-covid channel habits, with the online share of total spend falling to 43.1%, the lowest level observed since the onset of the pandemic in March 2020, continuing to illustrate the importance of businesses having a presence both online and in-store.

Barclays UK Consumer Spend Report gives you a unique and up to date picture of the nation’s spending habits based on the actual transactions, bringing it to life so you can take action and shape your strategy.

Our latest report looks at UK Consumer spending patterns for the period 23 July 2022 to 19 August 2022.

Brits tighten their belts in response to the rising cost of living

Despite Overseas Travel spending up significantly on last year’s levels, non-Essential spending was up just 3.6% when compared to August-21 (+8.0% in July), the lowest rate of growth for this category since February 2021.

This comes as Brits were cutting back on spend across a variety of discretionary categories including Clothing, Home Improvements and Digital Content as their budgets become more stretched from the rising cost of living.

With forecast higher inflation later in the year, 28.0% of consumers feel that their personal finances are currently not sufficient to cover their energy costs right now, and even more Brits (39.0%) feel that their personal finances will likely not be sufficient to cover their energy bills after the expected energy price rise in October, therefore further tightening of consumer spending is likely through the remainder of the year.

When compared to the same period last year, Essential card spending grew 7.2%, continuing to be propped up by a 23.9% rise in Fuel spending as Brits made the most of the summer holidays by embarking on Staycations and day trips by car.

Whilst Non-Essential card spending increased 3.6% compared to the same period last year, this was driven largely by the year-on-year surge in Overseas Travel spending. In fact, cost-conscious consumers cut back spend in a variety of non-essential categories in August including Clothing as the cost of living continues to bite.

More Brits begin to be impacted by rising energy prices, with the average consumer spending 45.2% more on Utilities compared to the same period last year (+43.9% last month). This comes as 93.0% of consumers were feeling concerned about rising household bills and an additional 45.0% were finding ways to save energy at home.

Hospitality and Leisure

Spend at Eating & Drinking venues down year on year, but up month on month

Whilst the Hospitality & Leisure sector saw reduced levels of year-on-year growth, this was due to the final easing of COVID related social contact restrictions this time last year, which saw a surge in takings at Restaurants as well as Bars, Pubs & Clubs.

It was in fact a positive month for both Bars, Pubs & Clubs and Restaurants when compared to last month, with spend up +8.4% and +6.6% respectively. This comes as businesses benefitted from the favourable weather with Brits socialising in beer gardens across the UK.

A woman taps her card in a restaurant. Spendings in the hospitality sector continued to grow in May

Although spend at Entertainment venues was down on the levels observed last year due to a release of pent-up demand, it is encouraging to see tourist attractions and venues such as theme parks, museums and zoos get a boost as the summer holidays kicked off with spend up 13.1% compared to July.

Mike Saul

Head of Hospitality and Leisure, Barclays Corporate Banking

Retail

Clothing spotlight

August was a turbulent month for Clothing retailers as consumer spending on Clothing saw its first year on year decline since March 2021.

Up until now, Clothing retailers had enjoyed several months of strong growth as consumers spruced up their wardrobes for the summer, however as the cost of living continues to bite, one in four Brits (24.0%) say they are looking to reduce the amount they spend on new clothes and accessories, indicating there may be trickier months ahead for Clothing retailers.

It wasn’t just Clothing retailers that saw cutbacks as consumers adapted their spending behaviours with Department Stores also seeing spend down -4.3% compared to the same period last year as almost a third (31.0%) said they are assessing whether every individual purchase is necessary amid the cost-of-living squeeze.

A woman shops in a grocery section. Customers are moving back to brick and mortar shopping

As budgets continue to be squeezed, it is clear that consumers are becoming increasingly mindful of their non-Essential Retail spending with Clothing and Department Stores both seeing sharp declines in spend in August when compared to the same period last year.

Karen Johnson

Head of Retail, Wholesale & Healthcare, Barclays Corporate Banking

Barclays Market and Customer Insights

Barclays Market and Customer Insights unlocks a wealth of customer transaction data and brings it to life so you can take action and shape your strategy.

We can help you keep up-to-date with spending trends, monitor your market position and enhance your understanding of customer behaviour, based on actual customer spending.

Leveraging anonymised data from our 250 million monthly customer transactions in the UK can help you understand who your customers are and how, when, and where they spend.

Contact the Barclays Market and Customer Insights team

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