Spending on essential items in the UK has seen a slight increase for the first time since August 2024, according to the latest Barclays Consumer Spend report. The report, which analyzes customer transactions and consumer research, indicates that while essential spending grew by 0.1%, non-essential spending saw a more significant rise of 2.7%. This growth was driven by entertainment, health and beauty, and digital content & subscriptions.
Despite concerns over rising food prices, with 86% of consumers expressing worry, supermarket spending increased by 1.0% year-on-year. Many consumers are seeking ways to maximize value from their weekly shopping trips, with 51% utilizing loyalty schemes and deals.
The report also highlights a shift towards online shopping due to January's cold weather conditions. A notable 13% of consumers preferred shopping from home, contributing to online retail spending reaching a three-year high at 58%.
Entertainment sectors performed well, with cinema spending up by 15.1%, partly due to popular films like "Mufasa: The Lion King" and "Sonic the Hedgehog 3." Digital content & subscriptions saw an increase of 8.3%, while takeaway spending reached a year-long high at 5.1%.
Pubs and restaurants experienced growth despite Dry January trends, with both categories showing a rise of 2.6%. This suggests an adaptation within the hospitality industry towards low or no alcohol alternatives.
Social media continues to influence purchasing decisions significantly, particularly among Gen Z consumers. Spending on pharmacy, health & beauty increased by 10.7%, influenced by wellness trends.
Karen Johnson from Barclays commented on these trends: “January’s figures are a positive signal that non-essential spending should remain strong in 2025.” Jack Meaning added insights into economic expectations: “We’re expecting GDP growth to pick up to 0.9 per cent in 2025.”