Consumer spending drops 26.7% in May

Consumer spending contracted 26.7 per cent year-on-year in May, according to the latest Barclaycard data.

The data, taken from having processed nearly half of the nation’s credit and debit card transactions, revealed that spending on essential items grew by 0.9 per cent in May. This was bolstered by a 24.5 per cent rise in supermarket spend – which increased to 27 per cent in the week preceding the VE Day weekend.

Spending on non-essentials decreased by 36.9 per cent year-on-year, with department stores and clothing declining 44.5 per cent and 42.4 per cent respectively. However, this drop was less steep than last month’s, which saw non-essential spend contract by 47.7 per cent - reflecting a slightly more positive outlook for UK retailers ahead of some stores opening on 15 June.

While eating and drinking saw an overall decline of 70.3 per cent year-on-year, there were signs of a recovery, as May saw a smaller fall in spending than in April (down 79.1 per cent). This coincided with more restaurants, pubs and cafes being able to offer delivery and takeaway services.

In an ongoing trend, consumers have remained loyal to local specialist food and drink outlets, such as greengrocers and independent convenience stores, with the category seeing a growth of 42.5 per cent – the highest increase since restrictions were introduced.

While home improvement - a category which includes garden centres - saw a small annual dip of 3.2 per cent, this represented a significant uptick from April, which saw a 42.7 drop year-on-year.

Online purchases at specialist retailers - including sports and outdoor outlets - was another bright spot this month, rising 96.3 per cent.

While consumer spending is increasing month-on-month across some retail categories, overall confidence in the UK economy remains low – indicating that the road to recovery may be a long one. Just 20 per cent of UK adults feel positive, though those aged 18 to 34 were noticeably more upbeat than those aged over 35.

Esme Harwood, director at Barclaycard, said: “We are seeing certain sectors start to increase sales as the climate eases and they adapt - it may take some time to recover from the economic impact of Coronavirus, but household confidence remains high and there is a strong desire among consumers to support businesses."

    Share Story:

Recent Stories


HULFT
Find out how HULFT can help you manage data, integration, supply chain automation and digital transformation across your retail enterprise.
Talking shop: retail technology solutions from Brother
Retail Systems editor Peter Walker sits down with Brother’s senior commercial client manager Jessica Stansfield to talk through the company’s solutions for retailers and hospitality businesses, what’s new in labelling technology, and the benefits of outsourcing printing.