UK consumers are showing a strong commitment to locally made products, as concerns about the rising cost of imported goods grow. According to the latest Barclays Consumer Spend report, nearly two-thirds are worried about increasing prices for imports, while 71% express a desire to buy more items produced in Britain.
Discretionary spending showed resilience, with 58% of people feeling confident in their ability to purchase non-essential items. However, essential spending contracted by 2.9%, as many consumers are cutting back due to expected increases in household bills.
In March, consumer card spending experienced modest growth of 0.5% year-on-year, which was significantly lower than the 3.7% inflation rate for the CPIH. The sunny weather contributed to increased spending on garden centers and food and drink specialist stores. However, consumers are also making efforts to reduce spending in anticipation of rising household expenses.
UK adults have displayed reduced confidence in their household finances compared to February, with confidence levels returning to those seen in January at 70% and 74% for household finances and the ability to live within means, respectively. Additionally, 37% reported attempting to decrease their expenditures in March.
A shift toward British-made products is evident, with 67% of consumers worried about increased costs for imported goods. Many are supporting UK businesses through their purchasing decisions. Additionally, 40% are seeking UK-made replacements for foreign-produced items.
The research, conducted in early April, revealed a slight dip in economic confidence from the previous month. Only 24% of people feel confident about the UK economy, 20% in global economic strength, and 20% in the US economy.
The trend of "big shopping" has returned as consumers prefer fewer, larger supermarket trips, with transaction volumes decreasing by 2.6% in March. Half of the shoppers appreciate the convenience and time-saving aspects, while 39% find this helps with budgeting.
Despite a minor 0.2% decline in retail spending, categories such as garden centers saw notable growth, with a 13.4% rise. This momentum reflects increased interest in gardening and DIY projects, with 23% planning gardening activities and 13% intending to take on DIY projects during the Easter holiday weekend.
Conversely, spending in hospitality and leisure increased by 2.8%, showing a preference for experiences over material possessions. Travel spending rose by 5.7% year-on-year, driven by increased travel agent and airline expenditures, and 61% of consumers reported spending on non-essential items despite financial constraints.
Spending on digital content and subscriptions grew by 5.7%, although 31% of consumers are re-evaluating the value they receive from these services. In response, 32% have canceled a subscription, and 16% have paused their payments.
Karen Johnson, Head of Retail at Barclays, noted, "Consumers are feeling the pressure of rising bills. In a bid to keep costs down, households are adopting more prudent budgeting, which has led to a resurgence of the 'big weekly shop.'"
Chief UK Economist at Barclays, Jack Meaning, added: "Following stronger than expected GDP growth in February, today’s data highlights the risks to consumer spending in the months ahead. We expect spending to remain muted through mid-2025, before picking up into 2026 as interest rates easing starts to be felt and uncertainty begins to normalize."