The country’s improving economic fortunes are slowly filtering down to households, leading to consumer spending growing 3.3 per cent so far this year according to data from Barclaycard, which processes nearly half of all credit and debit card transactions in the UK.
A steady stream of positive economic news throughout the year, rising employment and falling inflation has had a positive effect on households’ spending, as they feel greater job security and an increased likelihood of wage increases in the future.
After years of limiting their leisure, entertainment and travel expenditure in the face of a prolonged economic downturn, consumers have spent considerably more in all three sectors this year.
- Spending on entertainment – which includes pubs, restaurants, cinemas, concerts and most leisure activities – saw growth of 11.3 per cent, driven by a 14.6 per cent increase in restaurant spending.
- Spending on travel – which includes airline tickets, travel agents and hotel stays amongst other – grew 4 per cent in 2013, with the number of transactions jumping 14 per cent as families felt more comfortable spending money on themselves.
- Electronics stores also posted a strong year, helped by a series of high-profile product launches throughout the year. As well as seeing spend rise overall by 6.4 per cent, the number of electronics purchases jumped 23.3 per cent over the past eleven months.
Value for money: smaller but more often
Barclaycard’s data suggests that households are affording the extra discretionary spend by adopting a ‘smaller, but more often’ approach. The average amount spent per transaction is down for all major categories this year, on average by 3.7 per cent. But by cutting back in this way, consumers have allowed themselves to make more frequent shopping trips – the overall number of transactions is up 7.4 per cent overall.
The change in consumer behaviour is reflected in the findings of consumer research commissioned by Barclaycard, in which 63 per cent of people said the impact of the economic downturn on their finances means they are now much more careful to seek out value for money in their spending. Furthermore, 70 per cent said that that even as the economy recovers, value for money will remain the key factor when making purchases.
Spending in detail
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