Leisure Spending Still a Priority, with Entertainment up 12 Per Cent

STRICTLY EMBARGOED UNTIL 00.01, 6JUNE 2017

Consumer spendinggrowth falls to 2.8 per cent in May as shoppers ‘feel the squeeze’ of inflation

Leisure spending still a priority, with entertainment up 12 per cent

Consumerspending growth fell to2.8 per cent year-on-year in May, a 10-month low
Shoppers rowed back on spending across a number of categories, foregoing material goods in favour of experiences
Entertainment spending remained resilient, up 12 per cent, driven by double-digit growth in cinemas (11.5 per cent) and restaurants (11.7 per cent)
Just over half (53 per cent) ofconsumers feel confident in their household finances, down from a high of 70 per cent in March– with a similar proportion (52 per cent)saying they are ‘feeling the squeeze’ as a result of inflation

Consumer spending growth slowed to 2.8 per cent in May – despite Brits continuing to spend on the ‘experience economy’ – as overall confidence in household spending power cooled in response to inflation, which hit 2.7 per cent in April.

Data from Barclaycard, which seesnearly half of the nation’s credit and debit card transactions,revealed lower levels of growth acrosseveryday essentials (3.1 per cent) when compared with the Easter-driven increase of 11.4 per cent in April. Shoppers spentless on groceries and fuel in particular, easing supermarket (1.5 per cent) and petrol growth (7.4 per cent), down from 10.3 per cent and 14.7 per cent the previous month.

Consumers also reined in their spending on household goods and clothing.Both categories declined 2.9 per cent year-on-year – albeit from strong figures recorded in May 2016 – to enter negative territory for the first time in three and five months respectively.

There were a handful of bright spots, with Brits still willing to dig deep into their pockets when it came to spending on the ‘experience economy’.While growth in discretionary categories slowed overall, at 2.8 per cent in comparison to April’s 3.7 per cent, entertainment performed strongly (up 12 per cent) as Brits enjoyed dining out with friends and family in restaurants (11.7 per cent) and catching the latest film releases at the cinema (11.5 per cent) including Guardians of the Galaxy Vol. 2 and the much-awaited sci-fi thrillerAlien: Covenant.

Spending on hotels also increased (11.4 per cent) as consumers planned their summer breaks.Barclaycard’s consumer confidence research suggests this is likely to continue, as a thirdof Brits(34 per cent) indicate they prefer to spendon experiences rather than on physical items.

Although consumers still prioritisespending on leisure time compared to material goods, they are feeling increasingly cautious about their spending power overall. Just over half (53 per cent) say they feel confident in their household finances –the lowest level since Barclaycard started tracking confidence data in Q1 2015 and down from 70 per cent in March.

Consumers’ confidence in their ability to spend on non-essentials also dipped a further 2 percentage points in May to 41 per cent, with a slim majority (52 per cent) of Brits saying they are ‘feeling the squeeze’ due to a combination of inflation and subdued wage growth.

Of these, 69 per cent say the sentiment is because their weekly shop is more expensive than it used to be, and another three in 10 (31%) say it is because of increased fuel prices – highlighting the impact of rising prices on groceries and essentials more broadly.

Nevertheless, it seems some Brits will spend as usual this summer, with afifth (20 per cent)planningto increase spending on entertainment next month.A similar proportion (22 per cent) will be splashing out on holidays.

Paul Lockstone, Managing Director at Barclaycard, said:

“Consumer spending growth was subdued last monthas shoppers paused for breath after an Easter bounce in April.With CPI running at its highest rate since 2013, it’s no surprise that more of us are starting to ‘feel the squeeze’ of inflation and slower wage growth, perhaps prompting small changes to our spending patterns.

“It’s far too early, however, to suggest that this is the beginning of a period of increased caution. In May we witnessed the resilience of the ‘experience economy’ and all signs indicate spending on leisure time will continue to be a priority. As we head into summer, it will be interesting to see how the spending picture might change after consumers reassess their household budgets.”

Y/Y Spend growth by category
Overall / Online / In-store
Clothing / -2.9% / 10.9% / -8.8%
Family Clothing / -3.2% / 12.6% / -9.3%
Shoe Shops / -4.2% / 14.5% / -9.6%
Women’s Clothing / -4.7% / 3.2% / -9.3%
Men’s Clothing / -1.1% / 12.6% / -7.1%
Restaurants / 11.7% / 25.2% / 10.7%
Auto Parts & Accessories / 0.1% / 5.4% / -1.6%
Cinema, Theatre & Dance / 11.5% / 18.4% / -4.6%
Public Houses / 9.4% / -14.9% / 9.7%
Department Stores / -7.5% / -4.3% / -8.3%
DIY Stores / -1.7% / 7.5% / -2.6%
Travel Agents / -2.6% / 3.6% / -9.0%
Airlines / 2.7% / 6.7% / -19.2%
Supermarkets / 1.5% / 3.3% / 1.4%
Petrol / 7.4% / -31.5% / 7.4%
Gambling / 20.8% / 49.5% / -21.1%
Vehicle Sales / -14.3% / 40.8% / -15.0%
Hotels / 11.4% / 44.5% / 3.5%
Auto Repair Shops / -12.0% / 1.3% / -12.3%
Sports Shops / 1.0% / 8.6% / -1.8%
Furniture Stores / 14.2% / 8.9% / 15.2%
Telecoms / 17.9% / 36.3% / 7.0%
Household Appliances / -3.2% / 5.2% / -7.2%
Jewellers / 0.7% / 15.6% / -1.4%
Sports and Games Establishment / 3.3% / 3.8% / 3.0%
Garden Centres / -8.7% / 4.4% / -10.3%
Discount Stores / 6.4% / 31.3% / 2.3%
Gift Shops / -7.5% / -21.8% / -1.7%
Floor Covering Stores / 0.0% / 19.0% / -1.6%
Tourist Attractions / 1.3% / 6.0% / -2.0%
Amusment Parks / 22.1% / 51.1% / 14.3%
Aquariums / -35.4% / -60.6% / -27.0%
Electronic Stores / -5.5% / 3.4% / -9.7%
Cosmetic Stores / 10.1% / 20.5% / 0.7%
Optical Goods / 0.1% / 11.6% / -0.5%
Overall / 2.8% / 15.0% / -1.3%
Online share of spend
Clothing / 34.0%
Travel Agents / 54.0%
Average Transaction Value
Overall / -5.9%
Clothing / 0.1%
Airlines / -3.5%
Restaurants / -7.8%
Supermarkets / -4.4%
Petrol / 2.6%
Number of Transactions
Overall / 9.2%
Clothing / -3.1%
Airlines / 6.5%
Restaurants / 21.2%
Supermarkets / 6.2%
Petrol / 4.7%

– Ends –

Notes to editors

For more information please contact Linda Yang on 020 3555 5586 or .

The monthly spend data in this release relates to the period 23 April to 20 May 2017. It is compared with 24April to 21 May 2016.

The May consumer confidence data cited in this release are from YouGov Plc. Total sample size was 1,868 adults. Fieldwork was undertaken between 22nd - 23rd May 2017. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). The March and 2015 consumer survey findings were carried out by Longitude Research on behalf of Barclaycard. There were approximately 2,000 respondents, providing a representative sample of adult UK consumers by age, gender, region, income group, professional status and family situation.

About Barclaycard

Barclaycard, part of Barclays Bank PLC, is a leading global payment business that helps consumers, retailers and businesses to make and take payments flexibly, and to access short-term credit and point-of-sale finance. In 2016 we processed over £250bn in transactions globally. Barclaycard is a pioneer of new forms of payment and is at the forefront of developing viable contactless and mobile payment schemes for today and cutting-edge forms of payment for the future. We also partner with a wide range of organisations across the globe to offer their customers or members payment options and credit.

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