Experience economy 'clear winner' in 2017 despite 'cautious' consumer spending

Despite cutbacks elsewhere, the experience economy proved a clear winner in 2017, according to figures provided by the global payment business.

Consumer spending on travel went up by 3.3%, and the household category was down -0.4%.

The annual analysis of UK consumer spending by Barclaycard, which processes nearly half of all credit and debit card transactions in the UK, saw consumer spending growth get off to a strong start in 2017, with Q1 recording the highest quarterly growth rate (4.3%) of the year.

This was a direct impact of rising prices, which drove notable uplifts in spending on essential items and culminated in a record 11.4% on this category in April – although this was also driven in large part by the timing of Easter this year, said Barclaycard.

The company recorded slower overall spend growth in the second half of the year, characterised by a series of "minor yet necessary adjustments made by cautious consumers" to better balance the books. Shoppers cut back on ‘nice-to-haves’, particularly in October when inflation hit 3%.

Boosted

Spending on entertainment grew by 10.2% across the year, boosted in particular by spending in pubs and restaurants which saw double digit year-on-year increases of 12.2% and 12.6%t respectively in 2017.

Barclaycard corporate communications managing director Paul Lockstock said: “Consumer spending grew 3.6% in 2017, a figure which on the surface looks robust.

"It masks a story, however, of consumers 'consciously coping’ with a sustained period of rising prices and stagnant wage growth. In a bid to balance essential and discretionary spending, we saw Brits making a series of minor tweaks to everyday expenditure to balance the books amid wider economic concerns."

He added: “Confidence levels throughout the year show that consumers are continuing to watch the external environment closely and adjusting accordingly.

"With inflation hitting a near six-year high in November, it will be interesting to see how this impacts spending priorities in the early part of 2018, as consumers recover from a further squeeze this Christmas.”