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Consumer spending grew in October but half of Brits plan to cut down on Christmas purchases

Tom Bottomley
08 November 2022

UK consumer card spending grew 3.5% year-on-year in October, higher than the 1.8% growth in September, but well below the 8.8% rise in consumer inflation, as the cost of living continues to put pressure on Brits’ personal finances.

With the festive season fast approaching, almost half (48%) of Brits are planning to cut down on Christmas purchases, including festive activities and gifts, to save money this year. Of those consumers, six in 10 (59%) will be spending less on gifts for family and friends, according to the latest data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions.

Consumer spend on clothing saw a noticeably smaller decline year-on-year in October 2022 (-0.5%) than in September (-4.1%), as did department stores, at -1% versus -3.5% the previous month.

However, that improvement can be traced back to September 2021, which was a particularly strong month for clothing with many Brits returning to work for the first time post lockdown, and parents restocking wardrobes for the start of the new school term. After a bumper September, clothing spend dipped in October last year, making 2022’s figures look more positive in comparison.

Pharmacy, health & beauty stores were a bright spot in October 2022, growing 3.8%, which was considerably higher than September (0.8%), suggesting that image-conscious consumers are still keen to purchase items such as make-up and toiletries, even while spending more nights in due to the cost of living crisis.

Other findings include:

  • 21% of Brits plan to set a spending limit with their friends and family for gift purchases
  • 19% of Brits have started their Christmas shopping earlier this year to spread the cost.
  • One in 10 thrifty shoppers plan to buy more second-hand/pre-loved items to give as presents this year.
  • Growth of spending on utilities slowed in October as households started receiving discounts from the government’s Energy Bills Support Scheme.
  • Hospitality & leisure struggled as Brits cut back on discretionary spending and rail strikes dissuaded many from drinking and dining out.
  • Barclaycard’s “insperience” index, including digital subscriptions and takeaways, saw its strongest growth in 2022, as Brits spent more evenings in.

Esme Harwood, Director at Barclaycard, said: “With the festive season around the corner, we’re likely to see further cutbacks, as Brits reign in their Christmas spending. Consumers are adopting a restrained approach to festivities, reaching for pre-loved gifts and setting spending limits to manage their costs during this traditionally expensive time of year.”

Against a backdrop of political and economic uncertainty, confidence in the UK economy fell sharply to 15% in October 2022, the lowest level recorded since 2015 when Barclaycard began tracking such data, and less than half the level of this time last year (31%).

Meanwhile, 92% are worried about the negative impact of rising inflation on their personal finances, with 30% of Brits assessing whether every individual purchase is necessary, and a fifth (19%) feeling that the cost of living squeeze is having a negative impact on their mental health.

The consumer confidence survey was carried out between 21-24 October 2022 by Opinium Research on behalf of Barclaycard. There were 2,001 respondents, providing a representative sample of UK consumers by age, gender, region and income group. 

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