Consumer spending slows with Brits planning evenings in and more takeaways

Consumer card spending grew 1.8% year-on-year in September – the smallest uplift since February 2021, and well below the 9.9% rise in consumer price inflation – as Brits cut back on discretionary purchases in response to rising costs.

Instead, according to Barclaycard, Brits were spending more evenings at home, resulting in a boost for at-home categories such as takeaways and digital content.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, revealed that restaurant spend fell 12.% – further than last month’s drop of 11.% – while bars, pubs and clubs slipped into the red (-0.4%) for the first time since March 2021.

More than half of consumers (53%) said they were planning to cut down on discretionary spending so they can afford their energy bills throughout the autumn and winter, with most in this group cutting back on eating out at restaurants (60%), buying new clothes and accessories (59%), and drinking in pubs, bars and nightclubs (47%).

To save money, many Brits (51%) were planning to spend more evenings at home over the coming months and spend on takeaways and fast food saw its highest rise (10.1%) since March.

Despite ongoing inflationary pressures, confidence in household finances remained steady (59%) since last month (60%), although this was a decline from the level of confidence two months ago (66%) and an even steeper drop compared to a year ago (68%).

Esme Harwood, director at Barclaycard, said: “Energy price increases are understandably causing concern for Brits, as they worry whether they will have enough money to cover their household bills. Consumers are taking a savvy approach to budgeting as they reduce spending on discretionary items and seek more value in their weekly shop, which is having a knock-on effect on retail and hospitality sectors.

“However, Brits are also looking for ways to enjoy themselves at home while saving money, which has led to growth across “insperience” categories, such as digital subscriptions and takeaways. It is likely to remain a challenging time for many other sectors as consumers focus on essential spending and businesses continue to navigate inflationary headwinds.”

Makala Green, financial expert and author, added: “To ensure consumers can manage their budgets during this challenging time many will be weighing up whether they can afford certain nice-to-have purchases and experiences, such as buying new clothes or going out to eat. Categories like restaurants, pubs and clothing retailers are already seeing a decline in demand, as consumers focus on keeping cash in their pockets to cover essentials such as energy bills and weekly shopping.

“As the busy festive shopping period approaches, and the impact of rising energy bills starts to take effect, cost-saving behaviours will become even more crucial as Brits look to keep their finances in check.”

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