Here’s what UK consumers are cutting back on to save money: Barclays
Consumer card spending grew just 1% year-on-year in May, down from April’s 4.5% growth. While May’s two bank holidays helped lift discretionary spending, this was offset by wet weather in the second half of the month, and by consumers cutting back amid falling confidence in personal finances.
This is according to the latest Barclays Consumer Spend report, which combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending
The data shows confidence in household finances fell three percentage points to 67%, while the ability to spend on non-essentials fell four percentage points to 56%. This comes as discretionary spending was up just 2%, well below the 5.1% recorded in April, as nearly half (46%) of UK adults report intentions to reduce their outgoings.
Pointing to a potential explanation, Barclays’ research also reveals rising concerns in several areas including ‘shrinkflation’ (up four percentage points to 82%), ‘streamflation’ – the rising cost of digital content and subscriptions (up four percentage points to 64%) – and interest rates (up three percentage points to 64%).
For those cutting back, the most common category to rein in spending on is new clothes and accessories (56%). Card spending on clothing rose just 0.9% in May, while the volume of clothing purchases was up 3.8%, indicating shoppers are still refreshing their wardrobes, but switching to cheaper items or brands.
Despite exercising financial caution, two in five (40%) UK adults say they still enjoy treating themselves regularly but are finding budget-friendly options. Popular choices include waiting for sales (41%), opting for smaller, affordable treats (36%), and setting aside savings specifically for occasional indulgences (24%).
Grocery shopping
Grocery spending grew just 0.9% in May, a drop compared to April’s 6.6% uplift. The slowdown at supermarkets, which grew just 0.2%, could be due to price competition among the major providers, as well as the long-running trend of consumers seeking to extract more value from their weekly shop.
More than half (57%) are actively trying to reduce their grocery bills, with many in this group turning to loyalty schemes (57 %), discounted products (54%), discount supermarkets (49%), and own-brand alternatives (46%).
Other popular strategies include stockpiling favourites (39 %) and relying on the ‘big weekly shop’ instead of smaller ad hoc ‘top-up shops’ (29%).
