Consumers tightened their belts last month, as the latest figures show that spending in November grew by just 0.9%, which when factoring in inflation, was a year-on-year decline.
November is a key shopping month for consumers as many start their Christmas spending during the month, however according to a Barclaycard report, which combines hundreds of millions of customer credit and debit card transactions, spending in department stores fell by 5.9%, while electronics and clothing retailers also saw a fall of 5.0% and 3.3% respectively. It was not all bad news on the high street, however, with discount stores seeing a 6.9% growth year-on-year.
Overall, consumer spending on non-essentials increased by 1.3%, while spending on essentials remained the same year-on-year, with consumers spending 3.1% less on fuel but increasing their supermarket spend by 1.0%.
Away from the high street, consumers were choosing to spend more on going out to bars, pubs and clubs, which saw an 8.7% increase, but less on eating out in restaurants, which declined by 5.2%. Instead of eating in restaurants, consumers opted to stay home and order via food delivery apps, with spending on takeaways and fast food increasing by 11.4%. Consumers also chose to spend more on digital content and subscriptions, such as Netflix and Amazon Prime, which saw a 14.6% rise. While spending on entertainment out of the home, such as going to shows and concerts, saw a 13.0% decline.
The festive period will not offer much hope for struggling retailers, as the Barclaycard report also found that 36% of consumers were planning to spend less than usual on Christmas this year, with 42% of those cutting back saying it is because they are looking to spend less money overall. As well as this, only 31% of UK adults expressed confidence in the UK economy, while this drops to 27% for those aged 18-34.
Esme Harwood, director at Barclaycard, said: “With a backdrop of political uncertainty, consumer confidence has remained low this month – particularly among younger consumers – as Brits focus on discount shopping in a bid to tighten their purse strings this Christmas.
“Throughout 2019 we have seen the nation managing their budgets by seeking greater value for money, and this trend looks set to continue in December. As we head into the busy shopping season, retailers will no doubt be crossing their fingers for consumer confidence to rise enough to deliver some Christmas cheer.”
