Card spending returns to growth in May, as consumer confidence begins to show signs of recovery
Consumer card spending grew 0.8 %t year-on-year in May, up from April’s -0.1 %t decline, but still below the latest CPIH inflation rate of 3.4 %t. Essential spending climbed 0.7 %t, led by an 11.9 %t increase in fuel spending, while non-essential spending returned to growth, at 0.9 %t, after falling -0.3 %t last month.
Consumer confidence in the UK, European and global economies all rebounded in May, returning to the levels seen at the beginning of the year, after declining in March and April.
| Barclays economic confidence measures | |||||
| Jan | Feb | Mar | Apr | May | |
| Strength of the UK economy | 24% | 25% | 21% | 22% | 25% |
| Strength of the European economy | 28% | 29% | 26% | 25% | 28% |
| Strength of the global economy | 25% | 24% | 21% | 20% | 25% |
Consumers’ confidence in their household finances and ability to live within their means improved one percentage point each, to 65 % and 70 % respectively, while consumers’ confidence in their ability to spend on non-essential items grew to 52 % (up from 49 %).
Concerns about the impact of the Middle East on costs remain high, but have eased month-on-month, with a lower proportion of consumers concerned about rising energy bills (83 %, down from 85 %) and food prices (82 %, down from 84 %).
Consumers cut costs and build savings buffers to manage uncertainty
Two in three (65 %) are making financial adjustments in response to current uncertainty, with this group limiting non-essential purchases (45 %), takeaways and meals out (42 %) and energy use at home (38 %).
Of those making the effort to cut discretionary spending, 35 % say their top reason for doing so is to offset an increase in essential costs, while 34 % cited building a savings buffer as their main motivation.
Entertainment returns to growth
Entertainment spending grew 5.8 % in May, after declining -0.6 % in April, supported by the box office success of the long-awaited sequel The Devil Wears Prada 2, as well as The Sheep Detectives and Michael.
Digital content and subscriptions continued to perform strongly, rising 12.8 % year-on-year, its highest growth since August 2021. This was supported by popular series including Rivals Season 2, Euphoria Season 3 and Off Campus, as well as the final matches of the Premier League and UEFA Champions League, with some matches streamed online.
Airline uncertainty slows international travel
Travel spending fell -5.8 %, marking its third consecutive month of decline, with holidaymakers still taking a wait-and-see approach to their summer plans amid ongoing uncertainty. Airline spending led was down -12.9 %, suggesting consumers are putting off international travel. A fifth say they are taking a staycation this year, driven by convenience (46 %), a preference for UK trips (35 %), cost (33 %) and a desire to avoid air travel (30 %).
May’s sunny weather and the early bank holiday supported several seasonal categories, with food and drink specialist stores up 4.0 %, and health and beauty rising 5.0 %. Both furniture stores (6.4 %), and hotels and accommodation (2.7 %) returned to growth, after declining in April (down -0.9 % and -2.4 % respectively).
Julien Lafargue, chief market strategist, Barclays Private Bank and Wealth Management, said: “May’s data offers an early sign that household demand may be stabilising, but the macro backdrop remains finely balanced. The key question now is whether improving confidence can be sustained, particularly if inflation remains sticky and interest rates trend higher.”
Karen Johnson, head of retail at Barclays, said: “The warmer weather and first May Bank Holiday gave consumers more reasons to spend in May, particularly on seasonal essentials, UK breaks and affordable ways to enjoy time with family and friends. Shoppers are still being careful, with many continuing to build savings and managing subscriptions more closely, but they are also finding room in their budgets for the things that feel good value, convenient or worth prioritising.”
Overall growth figures
| Spend Growth | Transaction Growth | |
| Essential | 0.7% | -2.5% |
| Non Essential | 0.9% | 0.9% |
| OVERALL | 0.8% | -0.4% |
| Retail | 0.9% | -0.9% |
| Clothing | 0.8% | -2.5% |
| Grocery | -1.4% | -2.3% |
| -2.0% | -3.9% |
| 4.0% | 5.9% |
| Household | -0.1% | -1.5% |
| -1.0% | -4.1% |
| -1.1% | 0.7% |
| 6.4% | 6.9% |
| -6.9% | -6.6% |
| General Retailers | 4.1% | 2.6% |
| 3.0% | 3.3% |
| 11.9% | 8.9% |
| -1.9% | -5.8% |
| Specialist Retailers | 4.2% | 0.6% |
| 5.0% | -1.5% |
| -0.3% | -4.3% |
| 5.5% | 4.6% |
| Hospitality & Leisure | 0.0% | -0.5% |
| Digital Content & Subscriptions | 12.8% | 8.0% |
| Eating & Drinking | 0.8% | -4.0% |
| 0.4% | -2.7% |
| -1.5% | -3.6% |
| 2.9% | -5.7% |
| Entertainment | 5.8% | 9.8% |
| Hotels, Resorts & Accommodation | 2.7% | -5.5% |
| Travel | -5.8% | -1.2% |
| -5.3% | 3.5% |
| -12.9% | -7.7% |
| -3.4% | -4.0% |
| 0.7% | 4.5% |
| Other | 1.9% | 2.0% |
| Fuel | 11.9% | -2.6% |
| Motoring | -4.3% | 3.1% |
| Other Services | 0.2% | 6.8% |
| Insperiences | 6.6% | 2.8% |
| Online | 1.5% | 5.2% |
| Face-to-Face | 0.3% | -2.8% |