Source: Sharecast
Consumer card spending grew by just 1.0% year-on-year in May, significantly less than the latest CIPH inflation rate of 3.0% and the lowest level since February 2021, according to the latest UK Consumer Spending Report published by Barclays.
The monthly report, which looked at spending patterns between 20 April and 17 May, found that essential card spending was up just 1.6% – the lowest annual growth since August 2023 – as grocery spending growth eased to a two-year low of 0.3%, driven by lower food price inflation at supermarkets.
Non-essential spending grew by 0.7% – the lowest rate since the middle of the pandemic in February 2021 – which Barclays put down to the combination of May’s wet weather, and consumer concerns over rising household bills.
Spending on takeaways and fast food actually fell by 0.2% year-on-year, the first annual fall in four years, with 54% of consumers who are cutting discretionary spending citing takeaways as their number-one cutback. Restaurant spend was also down 15.7%.
However, looking ahead to the summer, 28% of consumers expect to spend more when the weather improves, rising to 39% for 18 to 34 year olds.
Meanwhile, retail spending was down 0.4% on last May, its worst drop since September 22, while travel spend growth eased to 4.7% from 5.8% the month before. Fuel spend was 1.9% lower than last year, when fuel prices jumped on the back of Russia's invasion of Ukraine.
"Overall consumer spending remained low in May, with consumers reducing non-essential spending in light of the recent hikes on household bills. Nonetheless, consumers remain optimistic, with many planning to spend more when the weather improves," said Rohan Kumar, head of Client Insights at Barclays.
