Consumer spending up 2.2% in February – but storms hamper retail sector

Consumer spending grew 2.2% year-on-year in February, propped up by digital subscriptions and takeaways, as Brits stayed home to avoid bad weather, according to Barclaycard.

Data from the payments business reveals that spending on essential items rose by 1.6%. This increase was bolstered by supermarket and fuel expenditure, which grew by 1.3% and 2.5% respectively.

Spending on non-essentials saw slightly stronger growth of 2.4%, yet the retail sector was impacted by three in 10 Brits (29%) spending less because of Storms Ciara and Dennis, with 53% of these consumers delaying a shopping trip as a result.

There was also an early sign that fears surrounding Coronavirus may have had an impact, as 28% of UK adults reported that they were avoiding the high street and other busy places.

Department stores continued to face challenges, contracting by 3.6% while clothing expenditure dipped 1.7%. Restaurants also performed poorly, declining by 6.4%, as did airlines and travel agents, which decreased by 0.7% and 0.3% respectively.

Many Brits opted to stay at home with a box set and a takeaway, as digital content and subscriptions enjoyed growth of 12.4% and takeaways & fast food rose by 8.7%.

On a brighter note, consumer confidence in the UK economy remains high, with 42% of UK adults feeling positive, up from 32% 12 months ago. This confidence is driven largely by Brits believing that progress is being made around Brexit, with one in five (21%) putting their optimism down to greater certainty about life outside the EU.

However, in a sign of ongoing consumer cautiousness, 36% of UK adults remain careful with their money and more than half (54%) are worried about the rising prices of everyday items and how this will impact their ability to spend.

Barclaycard director Esme Harwood said: “While storms and floods kept many Brits away from the high street this month, broader consumer spending has held up well as people put their money towards enjoying a takeaway and digital subscriptions.”

The monthly spending data was based on Barclaycard credit card and Barclays debit card transactions from January 25 to February 21, compared with January 26 to February 22. The consumer confidence survey was carried out between February 21 and February 24 by Longitude Research on behalf of Barclaycard. There were 2,005 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.

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