Barclays report reveals UK consumer spending slowdown amid rising energy costs

Barclays’ recent study has shown a declining trend in consumer spending in the United Kingdom, with card spending witnessing a meager year-on-year increase of 2.6% last month, the smallest rise since September of the previous year. This slowdown is partly attributed to a reduction in essential item expenditure, which dropped from a yearly increase of 4.6% to 3.9%. The primary factors influencing this decrease include falling food price inflation and 69% of consumers seeking ways to cut down on grocery expenses.

The report also highlighted a phenomenon called “slack-filling”, where product packaging misrepresents the actual quantity of the product inside. This trend has been noticed by 70% of shoppers, commonly affecting products such as crisps, sweets, biscuits, chocolates, and detergents. Additionally, about 41% of consumers reported Christmas food and drink items appearing smaller but costing more or the same as in previous years.

To circumvent high venue prices, 71% of consumers are opting to bring home-made food and drinks on outings. Non-essential spending only saw a modest increase of 2% from last October as nearly half of the consumers (47%) plan cutbacks to afford autumn and winter energy bills. These cutbacks are especially prevalent in areas such as takeaways, dining out, and purchases of new clothes and accessories.

Barclays underscored the decline in discretionary spending due to rising energy bill concerns and unseasonal weather patterns. They also pointed out growing consumer worries about their future spending ability.

In line with these findings, an Opinium survey revealed that 36% of consumers anticipate a costlier Christmas this year. As a result, 37% are planning to spend less on gifts due to financial concerns. Similarly, Barclays noted that 14% of consumers plan to reduce gift-giving due to fears of escalating energy bills and a potentially expensive Christmas.

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