Christmas party outfits boost clothing sales by 1.5% in December
Consumer card spending grew 4.4% year-on-year in December, up from 3.9% in November, with the rush to buy gifts and Christmas party outfits benefitting clothing and department store sales, which rose 1.5% and 2.8% respectively, compared to drops of -3% and -1.5% in November.
Sports and outdoor retailers saw their largest increase since March 2022, at 3.5%, a possible sign that Brits were purchasing gym wear and equipment in the winter sales for plans to kickstart a health and fitness regime in the new year, according to the latest sales data and consumer confidence survey from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions.
Spending on non-essential items grew 4.1% year-on-year in December – the largest increase since July 2022. Pubs, bars and clubs (up 12.6%) enjoyed their biggest uplift since May 2022, as Christmas parties and the FIFA World Cup boosted takings despite the impact of December’s rail strikes.
As holidaymakers booked getaways for 2023, the international travel sector also saw significant improvement. Travel agents and airlines rose 87.3% and 62.4% respectively, compared to 39.7% and 28.8% in November.
Staycations also boosted the domestic travel sector, with hotels, resorts and accommodation enjoying a sizeable boost (8.2%) after seeing no growth in November.
However, year-on-year growth in spending on “Insperiences” slowed to 4% in December, compared to 6.2% in November. That included digital content and subscriptions, which fell back into decline at -1.3%, as Brits say that they have cancelled or are planning to cancel their film/TV streaming services (16%) and paid-for TV channels (10%) to save money.
As December’s cold snap led more households to turn up or increase their heating use, spending on utilities increased 40.6%, slightly higher than the 40.1% rise in November. That comes as over six in 10 (62%) say they have been finding ways to save energy at home due to price increases, with 68% of those Brits wearing more layers at indoors and 50% avoiding using the central heating unless absolutely necessary.
Esme Harwood, Director at Barclays, said: “The retail, travel and hospitality sectors all saw noticeable growth in December. Sports and outdoor retailers saw their largest increase since March 2022 as many Brits sought to get a head start on their January health kick. Meanwhile, pubs, bars and clubs benefited from Christmas parties and football fans watching the World Cup.
“However, it’s worth noting that these figures look more positive in comparison to December 2021, as the spread of Omicron kept Brits away from high streets and hospitality venues. It seems this year shoppers returned to the high street to make the most of the festive period despite the cost-of-living challenges.
“The postal strikes hampered online retail due to fears of missing pre-Christmas delivery dates, while rising living costs caused more Brits to cancel their subscription services. Confidence in household finances saw a small jump, suggesting that consumers are feeling slightly more optimistic about their ability to balance their budgets going into the new year.”
After the festivities, Brits are feeling both charitable and frugal, with 36% intending to donate any unwanted Christmas gifts to charity, and 27% planning to save money by keeping unwanted presents so they can re-gift them to others.
Despite the ongoing cost-of-living squeeze, confidence in household finances rose slightly to 61% (up from 57% in November), while confidence in the strength of the UK economy remains low but steady at 18%.
The consumer confidence survey was carried out between 16-20 December 2022 by Opinium Research on behalf of Barclays. There were 2,000 respondents, providing a representative sample of UK consumers by age, gender, region and income group.
From January 2023, the sourced report has been renamed The Barclays Consumer Spending Index, though the methodology and data sources remain unchanged.