Barclays: Non-Essential Spending Reaches 2024 High

• Non-essential spending saw its highest increase of the year, but essentials had steepest decline since April 2020
• Amid widespread discounting and promotional activity, retail sales showed signs of recovery, driven by strong performance of clothing and beauty
• Entertainment spend growth reached 14-month high, while live shows and concerts increased 35.8 per cent after the sale of Oasis reunion tour tickets
• Digital content and subscriptions saw an increase, helped by popular streaming shows such as Emily in Paris and The Perfect Couple
• The Barclays Consumer Spend report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending 

Consumer card spending increased 1.2 per cent year-on-year in September, after returning to growth in August, but remained lower than the latest CPIH inflation rate of 3.1 per cent. Non-essential spending saw its highest growth so far this year, at 2.7 per cent, as retailers’ discounting incentivised shoppers. Several retail sub-categories enjoyed a strong performance, such as clothing, health & beauty, and department stores, while entertainment spend increased 14.4 per cent.

In September, essential items saw their greatest decline (-1.7 per cent) since April 2020. Spending on groceries fell (-0.8 per cent) for the first time since June (-2.2 per cent), as Brits continue to find ways to cut costs, with supermarkets experiencing a -1.1 per cent dip. Growth at food and drink specialist stores slowed to 2.7 per cent (down from 5.1 per cent in August).

Seven in 10 (70 per cent) consumers are looking for ways to get more value from their weekly shop or reduce how much they spend, up from 66 per cent in August, and higher than the 67 per cent 2024 average. Of those seeking savings, half (47 per cent) are looking out for loyalty scheme discounts and deals, while 46 per cent are using vouchers or loyalty points to get money off their shopping. This comes as two-fifths (39 per cent) of Brits say they are trying ‘slow shopping’, by being more intentional and discerning with their purchases.

Little luxuries and discounting boost retail spend

Overall retail spending rose 1.1 per cent in September compared to the same period last year – a marked improvement after the sector endured a challenging summer, as retailers’ discounting and promotional activity incentivised shoppers during back-to-school season. Spending on clothing increased 23.6 per cent month-on-month and 4.5 per cent year-on-year – the first uplift for the category in 2024, and its highest growth since July 2022 – while department stores saw their greatest boost (5.5 per cent) since August 2023.

In addition to being encouraged by markdowns, consumers are feeling more confident in their ability to spend on what matters most to them, with half (53 per cent) saying there are treats and luxury purchases they continue to buy, even when trying to budget. Two fifths (43 per cent) of these shoppers are prioritising indulging in sweet treats, spending an average of £22 each month.

Those prioritising new clothes and accessories (24 per cent) spend £73, while beauty spenders (18 per cent) fork out £65 each. This is reflected in the 8.9 per cent boost the category enjoyed in September – its highest growth this year – with recent Barclays Consumer Spend data showing that health and beauty has consistently outperformed broader non-essential spending since the start of 2023.

Ticket sales see Brits opening their Wonderwall-ets

Entertainment increased 14.4 per cent in September – the highest uplift recorded since July 2023 (15.8 per cent), when the pre-release window for Taylor Swift’s Eras Tour resulted in a surge in spending. A fifth (20 per cent) of those prioritising “treat purchases” even when budgeting continue to spend on theatre and live music tickets, following a trends towards spending on experiences post-COVID. 

Almost half (45 per cent) of consumers have noticed dynamic pricing coming into effect at the checkout – where companies raise prices during peak times or when demand is higher. Of this group, 46 per cent noticed it impacting live event tickets specifically. 

Despite this, enthusiasm for Oasis Live ’25 was unwavering. Spending on Shows & Concerts grew 35.8 per cent year-on-year in September, after tickets for the long-anticipated Gallagher brothers’ reunion went on sale. Spend on the day of general release was six times the rest of the month’s average daily spend. Meanwhile cinemas saw growth of 18.2 per cent in the month, amid the success of blockbusters such as Beetlejuice Beetlejuice, Deadpool & Wolverine and It Ends With Us. 

Binge-watching on the sofa beats bar stools

Insperiences saw a slight improvement in September, up 4.3 per cent in comparison to 3.0 per cent in August, signalling a return to indoor experiences as the darker, cooler evenings set in. 

Digital content & subscriptions enjoyed a particularly strong month (up 10.6 per cent), as streaming platforms released popular series such as Emily in Paris and The Perfect Couple. Consumers also enjoyed shopping from the comfort of the couch in September, as online retail spending (excluding groceries) grew 3.5 per cent. 

On the other hand, pubs, bars and clubs saw limited growth, at 0.6 per cent, down from 3.2 per cent in August. This comes as 40 per cent of those cutting their discretionary spending say they will cut-back on drinking out to save money. 

Brits are making a list, and checking it twice ahead of festive cost concerns

As Christmas products hit supermarket shelves, a quarter of Brits (23 per cent) anticipate that the upcoming festive season will be more expensive than last year. More generally, 88 per cent of UK adults say they are concerned about rising food prices, with a similar proportion (87 per cent) concerned about inflation. Four in five (82 per cent) are concerned about shrinkflation, and those that have noticed this have seen festive staples such as chocolate (57 per cent), crisps (47 per cent) and sweets (34 per cent) feel the bite of this trend.

Cost-conscious Brits (15 per cent) have also started saving money for Christmas, with reusing old decorations (33 per cent), keeping an eye out for festive offers (26 per cent), and buying gifts in advance to spread costs (22 per cent) popular ways to reduce costs .  

Karen Johnson, Head of Retail at Barclays, said: “Retail’s recovery emerged as a bright spot in September, despite there being colder weather and darker evenings on the horizon.

“While shoppers’ remain cost-conscious, it’s clear they’re responsive to retailers’ promotional activity. Discerning shoppers are also finding room for treats and little luxuries within their budget, demonstrating that consumers are prioritising spending on things that bring them joy.

“While many are anticipating a costly Christmas, there are encouraging signs that people feel confident in their ability to manage their household finances and take control of their festive spending.”

Overall growth figures 

Source : Barclays

Image : ColobusYeti / iStock / 883054240

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