Consumer spending continues to improve

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Consumer spending declined 2.6% year-on-year in July – the smallest fall since lockdown began, new research reveals.

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Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew 3.2% year-on-year. This increase was largely driven by supermarket shopping, which rose by 15.0%, helping to offset a 22.2% drop in fuel spend.

Shopping locally contributed to this recovery, with food and drink specialist stores – including off-licenses, greengrocers, and independent convenience stores – up 43.3% and takeaway and fast food by 20.4%. The figures are a reflection of 45% of Brits choosing to support nearby businesses, with 20% visiting local stores more often, and 19% spending more than usual.

The research reveals 37% of UK adults are now unconcerned about visiting shops. Consumers aged over 55 are most likely to say they aren’t concerned, with 18-34 year-olds the least likely to feel this way. Of those who are comfortable heading in-store, 46% are reassured by the requirement to wear face coverings and 45% by the presence of antibacterial hand gel at many retail entrances.

In addition, Brits are feeling more positive about their personal finances, with confidence in household finances returning to levels not seen in the UK since January 2020. Nonetheless, a feeling of cautiousness remains, as trust in the UK economy remains low at 23%, and job security at 43%.

Esme Harwood, director at Barclaycard, said: “It’s a welcome development for retailers to see spending up across many sectors in the first full month of data since lockdown restrictions started to ease.

“However, a sense of cautiousness still prevails. While some consumers feel more comfortable returning to shops, others are still wary of taking public transport and travelling outside the UK, with fears and uncertainties lingering about returning to normality too quickly.”