Consumer spending in December dropped by 13.8%

In the latest consumer confidence survey carried out by Longitude Research on behalf of Barclays, data showed total consumer card spending increased 12.2% in December compared to the same period in 2019, however restrictions and Omicron fears took effect across the sector.

Barclaycard head of consumer products Jose Carvalho said: “While consumer card spending levels are up on 2019, December was a mixed picture for retail, hospitality and leisure, as restrictions to tackle the spread of Omicron started to take effect.

“More Brits were either isolating or choosing to stay at home due to the new variant, which hampered face-to-face retailers as well as hospitality and leisure outlets.

“However, there were some bright spots; spending on essential items grew strongly as shoppers filled their trolleys with food and drink and celebrated the festive period with family and friends.

More time spent at home

“As we all spent more time at home, many used this as an opportunity to spruce up their living space in time for Christmas.”

The data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, revealed spending on essential items grew 13.7%, largely driven by a 13.9% rise in supermarket shopping, as consumers stocked up on festive food and drink.

Spending on non-essential items increased at a slower rate of 11.5% in December, compared to November’s 18.3% growth while entertainment saw a rise of just 0.7% in December compared to 22.8% in November.

However, among 16-24-year-olds, spending on entertainment grew 23.3%, as younger consumers visited festive attractions, such as Christmas markets and fairs.

Travel also had a challenging month, with hotels, resorts and accommodation returning to decline (-1.9%) for the first time since May 2021, however spending in DIY stores remained steady with a growth of 21.5%, compared to 22.5% in November.

Optimism for spending in 2022

The wider economic picture has encouraged consumers to be more cautious with discretionary spending, as 43% of the 2,001 people surveyed between 17 and 20 December 2021 suggested they expected rising inflation to affect household budgeting.

However, some consumers had a more positive outlook, as 36% said they expected the British public and businesses to adapt and thrive, despite the likely challenges of the year ahead.

New Year’s resolutions also provided a source of optimism, as nearly a fifth (19%) of those surveyed expected to spend extra money this year to achieve their goals, such as personal fitness and holidays, especially in younger people with 28% of 18-34-year-olds having said this.

Carvalho added: “It’s encouraging to see consumers’ widespread intentions to spend more in 2022 to achieve New Year’s resolutions.”