By Daniel Hunter
Barclaycard’s monthly analysis of UK spending shows that consumer spending in September remained well above the rate of inflation for the sixth month in a row, driven in part by strong retail spend as families continued to feel more positive about the future.
Restaurant spend performed particularly well in September, with growth of 11.2% - the strongest recorded this year — and much higher than the growth seen a year ago (September 2012: 5.3%) as families made the most of the mild start to autumn and ate out more. However, the average amount spent was down (-6.3%), suggesting that they ate out more but spent less each time.
Online clothing spend performed particularly well in September, as consumers updated their wardrobes for autumn and sought out the latest fashions online in advance of them hitting the high street. Men’s and Women’s Clothing were up 38.0% and 36.1% respectively.
The rebounding housing market contributed to spend on DIY increasing by 5.8%, but garden centre spend dropped with the temperatures, declining 2.2% - the first time it witnessed negative growth since March. With spend up 11% on average from April through to August it appears that consumers spent on their garden in the early part of the summer.
And the shift from driving to cheaper public transport continued; with spend on Petrol dipping into the red (-2.1%) after seeing three months of positive growth, whereas spending on public transportation grew 4.8% on last September.
As consumers remain determined to get the best value for their shopping, a new trend of ‘little and often’ could see an end to the weekly shop. The average transaction value for supermarket spending in September fell 5.2%, whilst the number of transactions was up 4.8% year-on-year suggesting that instead of doing their supermarket shopping all in one go, value-seeking Brits are hunting down the best bargains by visiting a number of different shops.
Overall supermarket spending for the month fell slightly (-0.7%), despite higher food inflation (4.1% in August) pushing prices up.
Strong restaurant growth bucked the trend in overall declining travel and entertainment spend, as Brits tighten their purse strings in the run up to Christmas. Cinema and theatre spend fell by -0.7% year-on-year, and Hotel spend grew by just 2.4%, both of which were the lowest readings so far in 2013.
Airline spend also slowed from its double-digit growth and dipped into negative territory (-0.3%) for the first time since the beginning of 2012. However the number of airline transactions grew 6.6% compared to last September, indicating that falling ticket prices was to blame for the drop in spend growth, suggesting that travellers are holding out for cheaper airline tickets, rather than cancelling trips completely.
“Consumer spending was up again in September, growing 3.0% year-on-year and out-pacing inflation for the sixth month in a row," Val Soranno Keating, Chief Executive of Barclaycard said.
"Shoppers are spending more but they remain cautious and we’re seeing them make smart choices to stretch the household budget — using public transport instead of the car, eating out more but spending less each visit, and shopping around supermarkets to take advantage of the best offers.
“There’s been a lot of debate over the scale of the economic recovery and whilst we’re not quite out of the woods yet, the fact that consumer confidence is at a six-year high, economic growth is up, and spending continues to grow, clearly shows that we’re on the right path.”
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