Consumer spending growth regained some of the ground it lost over the summer in September, growing 3.7 per cent year-on-year, helped by the start of the Rugby World Cup.
After slipping to its lowest level in 14 months in August following a wet summer, annual spending growth picked up in September on the back of an increase in spending in pubs, off licences, sports shops and supermarkets as fans got ready for the start of the four-yearly Rugby World Cup.
Pub and restaurant spending increases
According to the latest data from Barclaycard, which processes nearly half of all credit and debit card transactions in the UK, spending on clothing, entertainment and grocery sectors all performed strongly and lifted overall spending growth by 0.7 percentage points compared to the previous month.
Shopping for new rugby shirts helped boost spending on clothing by 8.1 per cent year-on-year – up sharply on the 1.1 per cent growth in August – as well as by 9.9 per cent in sports shops – up from 3.0 per cent.
Entertainment spending grew by 12.8 per cent year-on-year, as pub spending increased 11.6 per cent and restaurants 12.6 per cent – their 26th month of consecutive double-digit growth.
Consumer confidence
Overall spending for the third quarter of this year was 3.8 per cent, down from 4.5 per cent in the second quarter– its highest in two years. Falling levels of growth in most categories over the penultimate quarter of this year suggest that households have reined back on some of this extra spending in advance of Christmas.
But with Barclaycard research into consumers’ level of fiscal confidence painting a positive picture, it’s likely only to be a temporary breather.
Research carried out for the Q3 edition of the ‘Barclaycard Consumer Spending Report’, found that nearly a third (30 per cent) of consumers say they are better off now than they were expecting to be a year ago and more than half (52 per cent) say they are confident in their job security (up from 48 per cent in Q2).
It also found that a majority are feeling positive about their household finances, ability to live within means, and their ability to spend more on non-essential items. Almost three quarters (73 per cent; up from 70 per cent in Q2) have no concerns about their ability to live within their means each month, while around three in five (58 per cent; up from 56 per cent in Q2) are confident in their ability to spend more on discretionary items.
Chris Wood, Chief Operating Officer at Barclaycard said:
“Whilst the Rugby World Cup helped spend growth recover in September, it remained below both the level of increase we saw last year and the average level we’ve seen this year. After a record-breaking Q2, which saw the highest level of growth in two years, consumers seem to be ‘pausing for breath’ before the run-up to Christmas begins.”
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