Barclays Report
According to a recent report by Barclays, consumer spending in the UK has grown at the slowest pace in over a year. The report, based on spending through debit and credit cards between September 24 and October 21, shows an increase of only 2.6% compared to the same period in the previous year. This slowdown reflects concerns about the cost of living in the run-up to Christmas.
Despite the overall slowdown, some sectors have seen growth. For instance, travel agents saw their highest uplift in consumer card spending last month since May, outstripping general trends. The Rugby World Cup also boosted pubs and bars for the second month running, while the travel sector performed well as holidaymakers booked getaways in the UK and abroad
- Consumer spending growth slowed to 2.6% in August 2023, the lowest rate since April 2020.
- The slowdown was driven by weaker spending on non-essential items, as consumers continued to cut back in response to rising living costs.
- Spending on essentials also slowed, with growth in supermarket spending falling to its lowest level since April 2023.
- The travel and hospitality sectors provided some uplift, with spending on eating and drinking out growing by 6.4%.
- However, this was offset by declines in spending on other sectors, such as clothing and fuel.
The Barclays report suggests that consumer spending is likely to remain subdued in the coming months, as households continue to grapple with rising living costs. However, there is some hope that spending could pick up in the run-up to Christmas, as shoppers take advantage of discounts and promotions.
Implications for Businesses
Businesses that rely on consumer spending will need to be mindful of the current challenging economic environment. They may need to consider offering discounts and promotions to attract customers, and they may also need to find ways to cut costs in order to remain profitable.
Overall, the Barclays report suggests that the UK consumer is facing a tough time at the moment. However, there are some reasons to be optimistic, such as the continued growth in the travel and hospitality sectors. Businesses that can adapt to the changing consumer landscape will be best placed to succeed in the years to come.
