Consumer spending grew 7.6 per cent in May as easing of restrictions saw more Brits shop, socialise and get set for summer


This article is brought to you by Retail Technology Review: Consumer spending grew 7.6 per cent in May as easing of restrictions saw more Brits shop, socialise and get set for summer.

Consumer spending rose 7.6 per cent in May compared to the same period in 2019 – the highest growth recorded since coronavirus restrictions began – as the further lifting of lockdown restrictions encouraged more Brits to shop and socialise.

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, reveals that spending on essential items grew 11.4 per cent compared to May 2019 – the sharpest increase since before the onset of the pandemic.

Spending on essentials was bolstered by supermarket shopping (up 17.7 per cent) and face-to-face spending at local food and drink specialist retailers, such as butchers, off-licenses and independent convenience stores, which rose by 69.3 per cent – a sign that Brits are continuing to support local businesses, even as restrictions relax. 

The wet weather in early May was not enough to deter consumers from returning to shops, with overall spending on non-essential items rising 5.8 per cent compared to the same period in 2019, while face-to-face spending at non-essential retailers grew 8.0 per cent.

As shoppers updated their wardrobes for post-lockdown socialising, there were increases at clothing (8.5 per cent) and department stores (8.6 per cent).  While in-store clothes shopping was still down on the same period in 2019 (-6.1 per cent), this was a significantly smaller decline than last month (-46.9 per cent).

Image-conscious Brits also spent more on beauty products and treatments, with pharmacy, health and beauty stores (including nail salons and hairdressers) seeing a 17.8 per cent rise – a significant improvement on the growth recorded last month (3.7 per cent).

Other specialist retailers, such as gift shops, toy shops and jewellers, enjoyed growth of 27.2 per cent – over four times higher than last month’s increase (6.4 per cent) – perhaps a sign that consumers are buying more presents for reunions and celebrations such as weddings, birthdays and baby showers. This comes as nearly seven in 10 (68 per cent) say they are comfortable spending time with friends and family outdoors, and six in 10 (61 per cent) say they are comfortable doing so indoors.

Brits braved the rain to get out and about this month, with spending on entertainment – including family days out, theme parks, cinema tickets and gym memberships – showing noticeable improvement, with a significantly smaller decline (-28.6 per cent) than in April (-50.6 per cent). Spending at sports and outdoor retailers showed strong growth as consumers embraced more active lifestyles in May, with a 47.0 per cent uplift in the category versus 26.2 per cent growth last month. 

Hospitality outlets showed signs of recovery as more industry-wide restrictions were lifted, most notably the change to indoor dining restrictions on 17 May. While restaurants as well as bars and pubs saw respective declines of 53.2 per cent and 19.4 per cent for the month overall, these were marked improvements on the 74.4 per cent and 67.2 per cent contractions in April. In fact, spending on bars and pubs saw a 1.4 per cent growth among 16-24-year olds, as younger consumers returned to socialising at the earliest possible opportunity. 

More holidaymakers either embarked on or booked staycations in May, with resorts and accommodation showing strong growth of 25.5 per cent. Perhaps due to the vaccine rollout, older consumers shelled out the most on staycations, with spend from those aged 50-64 up 40.5 per cent, compared to a 13.1 per cent decline among 16-24-year olds. This comes as one in five (20 per cent) say they’ve already made plans to go on a staycation in the weeks following 21st June, and around the same proportion (18 per cent) intend to go on more holidays in the UK, even after international travel restrictions have been lifted.

However, despite international travel being allowed to restart, travel agents and airlines continue to be hit hard by the traffic light system restrictions, seeing declines of 76.5 per cent and 74.2 per cent respectively – only marginal improvements on the 82.4 per cent and 82.1 per cent drops last month. In fact, just 28 per cent of Brits say they are comfortable travelling to countries currently on the green list, though this rises to over a third (36 per cent) among 18-24-year olds. 

Consumer confidence in the economy and household finances remains noticeably higher than this time last year, holding up at 35 per cent and 72 per cent respectively, compared to 20 per cent and 67 per cent in May 2020. 

Raheel Ahmed, Head of Consumer Products, said: “May was a positive month for a range of categories, with the nation clearly determined to show support for retailers and local businesses. As friends and families reunited after months apart, it is reassuring to see signs of recovery for the entertainment and hospitality industries, both of which have faced significant challenges over the past year. 

“While international holidays continue to be hampered by restrictions, staycations in the UK are providing a welcome boost to the travel sector, as May saw more holidaymakers, particularly in the older age groups, book or embark on trips. With summer – and hopefully more of this warmer weather – on the way, we hope to see these positive trends continue as Brits make the most of their newfound freedoms.”

Add a Comment

No messages on this article yet

Editorial: +44 (0)1892 536363
Publisher: +44 (0)208 440 0372
Subscribe FREE to the weekly E-newsletter