Barclaycard’s report on consumer spending in May 2018
Barclaycard process almost half of all the credit and debit card transactions in the UK. Their report on consumer spending in May 2018 shows that the warm weather over the month’s first Bank Holiday encouraged shoppers to head to the high street.
The main points highlighted in the report:
- Consumer spending grew by over 5.1% year on year, the highest level seen since April 2017.
- The warmer weather led to shoppers returning to shops. In-store spending rose by 2.6%.
- Non-essential expenditure increased 4.6%, the highest level seen in over a year.
- Consumers continue to prioritise experiences. This is expected to continue as we head into summer, especially with upcoming major music and sporting events.
Garden sales have blossomed
In a major contrast to the ‘Beast from the East’ in March 2018, we had an unusually hot early May Bank Holiday, which meant many retailers had a bumper weekend. DIY stores saw consumer spending increase by 19.7%. Supermarkets did well too, they were up 10.1% compared to the same long weekend in 2017. Incredibly garden centre spending rose by over 50.3% over those three days; and by almost a quarter over the month as a whole.
Spending on experiences
Pubs also continued to do well with sales rising 19% during the long weekend as the British public made the most of the sunshine.
Spending on experiences looks like to continue as many parts of the country continue to bask in glorious weather. Music events and of course the FIFA world cup should help this trend.
But a note of caution…
Despite optimism about the weather, there remains underlying caution. Confidence in household finances dropped to 57% which is down from 62% in April. Only 10% of consumers feel that their has been a positive impact on their spending power, despite inflation dropping to 13-month low.
How did our customer’s categories do?
|Floor Covering Stores||-3.90%||13.20%||-5.60%|
As mentioned earlier garden centres, DIY stores, and supermarkets are the clear beneficiary of the warmer weather.
Other retailers experienced mixed results. Electronic stores fared particular badly as consumers favoured going to the pub over splashing out on the latest gadgets. This category, however, can often produce skewed numbers depending on what high profile new gadgets are launched in a given month.
Furniture stores grew by a small amount but as we have seen in previous months shoppers are spending more and more online. This trend is bound to impact on boardroom strategy discussions and we will see more Marks & Spencer ‘like’ scenarios playing out.
What action should you take?
All this information can help businesses inform strategy and marketing efforts.
Consumer reports such as these, along with key internal and external data, can help provide key insights into what is happening in your market. It is important to keep questioning how your business is performing against your competition. It is also key to understand how online sales are faring compared to in-store sales. Reviewing and adjusting your strategy now to respond to key market trends is vital for future success.
The source of data for this article can be found here.