Consumer Card Spending Grew 10.6 Per Cent In 2022, Yet Rising Living Costs Made Brits More Selective About Purchases

• Holidays abroad and socialising at pubs and restaurants led to significant recovery for international travel and hospitality
• Spending on utilities grew 32.9 per cent, with Brits increasingly concerned about rising household bills
• While face-to-face shopping returned to growth, the retail sector struggled due to a fall in household spending and a reduction in average transaction values
• The Barclaycard report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending across 2022 

Consumer card spending increased 10.6 per cent year-on-year in 2022, as the lifting of all Covid-19 restrictions encouraged Brits to shop more in-store, eat and drink out, and book holidays abroad. However, the cost-of-living squeeze meant overall retail spend was down compared to 2021, with consumers using smaller basket sizes as a way of managing budgets. 

New data from Barclaycard reveals that spending on essential items grew 6.3 per cent in 2022. This lift was largely due to a 28.3 per cent rise in fuel spend, driven by surging petrol and diesel prices and increased car use, as life returned to normal following almost two years of Covid-19 restrictions.

Insights from Barclaycard’s monthly Consumer Spending Index, which combines hundreds of millions of customer transactions with consumer confidence data to provide an in-depth analysis of UK spending, reveals the top 10 trends that have shaped consumer behaviour this year.

1.    Energy bills spiral

Surging energy prices caused purse strings to tighten, with the average customer spending 32.9 per cent more on utilities than last year. As a result, Brits became more worried about the impact of rising household bills on their personal finances, with 92 per cent now expressing concern about this, up from 86 per cent last year*.

2.    Brits rediscover face-to-face shopping

While 2021 saw the continued rise of online shopping, a full year of open high streets in 2022 meant face-to-face retail spending returned to growth, rising 8.3 per cent, while online retail spending declined -12.2 per cent.

The retail sector overall saw an increase in the total number of card transactions (up 5.0 per cent), however, the total amount spent was down -0.8 per cent. This indicates that shoppers were using smaller basket sizes as a way of keeping better track of their budget amid the cost-of-living squeeze.

3.    Grocery in decline

Despite rising inflation and higher food prices, spending on groceries was down -0.1 per cent overall compared to 2021. This is likely due to the growing number of consumers who say they have been actively looking for ways to reduce the cost of their weekly shop, with 69 per cent reporting this was a focus November**. The most popular methods to obtain greater value from grocery shopping this year were paying closer attention to the prices of specific items (55 per cent), cutting down on one-off treats (51 per cent), and switching to unbranded or supermarket-branded versions of popular items (51 per cent).

Just like retail spending more broadly, face-to-face spending at supermarkets was up 2.1 per cent, whereas online spending fell -12.8 per cent – a sign that shoppers were returning to pre-pandemic habits and visiting supermarkets more frequently after work or while out and about, instead of buying most of their groceries online.

4.    Hospitality and leisure bounces back

The lifting of all Covid-19 restrictions meant that both restaurants and pubs, bars and clubs benefitted from a pent-up demand for drinking and dining out, recording growth of 37.1 per cent and 53.6 per cent respectively. This growth also explains some of the fall in grocery spending, reflecting Brits opting for meals out instead of cooking at home, as they made up for missed opportunities.

The reopening of live event venues also gave the entertainment sector a sizeable boost (up 41.1 per cent), spurred by demand for festival and theatre tickets and family days out.

5.    Investing in appearances

The reduction in working from home, and the return of holidays and nights out, also corresponded with people investing more in their appearances. This meant pharmacy, health & beauty retailers, as well as clothing and department stores saw noticeable growth compared to 2021 (14.7 per cent, 11.2 per cent and 7.4 per cent respectively), with consumers updating their looks and wardrobes by purchasing new make-up, clothes and accessories.

It seems men have been the keenest to upgrade their looks, with their spending on both clothing and pharmacy, health & beauty rising faster than that of women. Across the year, Men spent 12.2 per cent more on clothing, compared to 11.0 per cent for women, and 15.9 per more on pharmacy, health & beauty, compared to 14.5 per cent for women.

6.    Fall in home improvements

The cost-of-living crunch and reopening of hospitality venues discouraged homeowners from investing in their properties in 2022, causing household spending to decline -5.4 per cent. Within this category, home improvements and DIY fell -5.5 per cent, and furniture stores saw a drop of -3.3 per cent. This decline was more prominent among 16 to 24 year-olds and 25 to 34 year-olds (-10.2 per cent and -9.7 per cent respectively) compared to over 65s (-0.9 per cent).

7.    Global travel rebounds

After two challenging years, the international travel sector saw a significant recovery. Holidaymakers booked more getaways abroad, resulting in large increases for travel agents (190.6 per cent) and airlines (132.1 per cent), despite the disruption across the aviation sector during the summer months.

The demand for staycations also remained strong, with hotels, resorts and accommodation seeing an uplift of 27.5 per cent, likely boosted by the summer heatwave, and the additional bank holiday for the Queen’s Platinum Jubilee.

8.   “Insperience” economy on the rise

Shoppers turned to “insperiences” – at-home experiences – as a way to cut back on non-essential spending during the cost-of-living crisis, with the category rising 4.1 per cent year-on-year. Takeaways and fast food – which has grown steadily since the first Covid-19 lockdown – jumped another 12.3 per cent this year, as Brits continued to crave convenient meal options and even more restaurants moved online to satisfy that demand.

Surprisingly, the biggest jump in takeaway spending came from the over 65s, who spent 31.8 per cent more than last year, compared to a smaller rise of 8.2 per cent among 25 to 34 year-olds.

9.    Subscriptions taper off

Digital content and subscriptions was one category within insperiences which saw a slight year-on-year decline (-0.8 per cent). This is likely due to Brits becoming increasingly selective about their spending, with one in five (21 per cent) reporting in June that they were reviewing their subscriptions and cancelling any they could live without***.

However, the category has seen slight improvement towards the end of the year, as half of Brits in both September and October (51 per cent and 50 per cent respectively) said they were swapping evenings out for nights in to save money.

10. Active money management

The cost of living crisis has made Brits increasingly aware of every pound they spend, and many have been managing their money much more closely in order to make cutbacks. Among those who have made changes to their banking and money management, the most popular methods this year were checking bank balances more often (70 per cent), monitoring the prices of household essentials (46 per cent), and keeping physical receipts to keep better track of spending (30 per cent).

Esme Harwood, Director at Barclaycard, said: “The lifting of all Covid restrictions meant card spending was up overall compared to last year. Hospitality, leisure and travel all received a boost as Brits made up for lost time by socialising with friends and jetting off on holidays.

“However, the cost-of-living squeeze has clearly impacted the retail sector. Consumers have had to rein in spending on purchases like subscriptions and home improvements, as well as reduce their basket sizes in general.

“As these inflationary pressures continue, all categories are likely to face further headwinds in 2023. However, I am optimistic that both consumers and businesses will continue to find ways to adapt and respond to these challenges, as they did throughout the pandemic.”

Harry Wallop, Retail Expert and Commentator, said: “2022 has been a contrasting year for retail and consumer spending. On one hand, the pent-up demand from the pandemic for trips abroad and evenings out has given a sizeable boost to some key sectors. In turn, this has had a positive impact on categories such as clothing and health and beauty.

“On the other hand, consumers are increasingly conscious about the cost of the items they’re buying. Many are changing their behaviours to monitor their outgoings. As we head into next year, it’s likely that Brits will remain in a similar mindset – keen to conserve their cash where possible but also happy to splash out on items and experiences that give them a boost once in a while.”

Notes to editors

Established in 2014, Barclaycard issues a monthly press release commenting on consumer spending trends.

Barclaycard sees nearly half of the nation’s credit and debit card transactions, which provides us with unique insight into UK consumer spending. The spending data in this press release is based on Barclaycard credit card and Barclays debit card transactions, and is analysed by the Barclays Market and Customer Insights team. It relates to the period 1 January 2022 to 26 November 2022. It is compared with 1 January 2021 to 26 November 2021.

The utilities spend growth in this press release is calculated using both credit and debit card transactions, as well as non-card payments (e.g. direct debits). It relates to the period 1 January 2022 to 25 November 2022. It is compared with 1 January 2021 to 25 November 2021. Please note that utilities are not part of the calculations for Overall, Essential and Non-Essential spend growth, quoted in the table below, as these are based solely on credit and debit card transactions, and utilities are excluded.

* The consumer confidence survey for this statistic was carried out between 15 and 18 December 2022 by Opinium Research on behalf of Barclaycard. There were 2,000 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.

** The consumer confidence survey for this statistic was carried out between 15 and 18 November 2022 by Opinium Research on behalf of Barclaycard. There were 2,001 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.

*** The consumer confidence survey for this statistic was carried out between 24 and 28 June 2022 by Opinium Research on behalf of Barclaycard. There were 2,000 respondents, providing a representative sample of UK consumers by age, gender, region, and income group.

About Barclaycard

Barclaycard, part of Barclays Bank PLC, is a leading global payment business that helps consumers, retailers and businesses to make and take payments flexibly, and to access short-term credit. In the UK we process nearly £1 in every £3 spent using credit and debit cards, and in 2021 we processed over £270bn in transactions globally. We also partner with a wide range of organisations across the globe to offer their customers or members payment options and credit.

About Barclays Market and Customer Insights

Barclays Market and Customer Insights helps businesses keep up to date with spending trends, monitors their market position and enhances their understanding of customer behaviour, based on actual customer spending. For further information, please email contact-MCI@barclays.com.

Source – Barclays