Consumer spending bounced back in November as seasonal shopping boosted retail and travel

Consumer card spending grew 2.9 % year-on-year in November – less than the latest CPIH inflation rate of 4.7 % but higher than October’s 2.6 % growth – as Brits’ confidence in their ability to spend on non-essential items (56 %) reached its highest level since April. The high street received a welcome boost from month-long Black Friday sales, as well as the late arrival of cold and wet weather, which encouraged shoppers to update their winter wardrobes.

Spending on essential items saw a smaller increase (3.3 %) than in October (3.9 %), as falling petrol and diesel prices impacted fuel spend (-10.9 %). Growth at supermarkets was also lower month-on-month (5.0 % vs 5.2 %) following the easing of food price inflation and the majority of shoppers (67 %) seeking ways to reduce their grocery food bills.

Of these cost-conscious Brits, half (50 %) are using vouchers or loyalty points to get money off their shopping, and 49 % are choosing budget or own-brand goods over branded items.

Encouragingly, while the proportions of Brits concerned about inflation and food prices remain high (each at 86 %), both fell to their lowest levels since December 2021. Similar improvements were also recorded on attitudes towards fuel prices, household bills and interest rates.

‘Shrinkflation’ impacts festive fare

Shoppers expect to fork out an average of £105.43 more on Christmas this year than in 2022. Festive food and drink is expected to be the largest contributor to this increase, rising by an average of £25.87, followed by gifts (+£18.62) and activities (+£11.86).

The extra expenditure is likely due to rising costs and ‘shrinkflation’, with three in five (60 %) noticing that some festive items are getting smaller despite costing the same. One in three (36 %) has spotted shrinkflation on boxes of chocolates, followed by tins of biscuits (28 %), cheese (15 %), mince pies (14 %) and Christmas cake (13 %).

Black Friday boost for retailers

Spending on non-essential items grew 2.7 % in November – higher than in October (2.0 %) – as the retail sector received a boost from the early start to Black Friday sales and late arrival of seasonally cold weather. Clothing retailers (2.8 %) and department stores (5.0 %) saw notable increases compared to October (-3.0 % and 0.4 % respectively), as Brits made the most of promotional sales and updated their winter wardrobes.

The extended sales period impacted activity on Black Friday itself, with Barclays data showing that transaction volumes were down slightly (-0.6 %) compared to the same day in 2022. However, despite its reputation, Black Friday wasn’t the busiest shopping day in November. Transactions on Sunday 26th November (dubbed “Super Sunday”) outpaced Black Friday by 13.5 %, demonstrating it is no longer a single-day event.

This comes as six in 10 (59 %) say they are actively seeking out deals and discounts more often, due to rising costs. Of this group, over half (56 %) are making use of loyalty programmes, while 40 % regularly search online for discount codes before making a purchase. More than one in six (16 %) even admit to guessing codes such as ‘HELLO10’, in the hope of bagging an unexpected bargain at the check-out.

Seasonal socialising

Restaurants fell further into decline in November (-11.9 % compared to -10.3 % in October), as over a third (36 %) reported that the cold weather and dark evenings have had an impact on their spending patterns. Nearly half (46 %) of these Brits are eating out less frequently in favour of cooking meals, while 29 % are socialising with friends and family at home instead of going out.

This perhaps explains why “insperiences” (at-home experiences) fared well in November, with spending on takeaways and fast food (6.1 %), as well as digital content and subscriptions (5.8 %) seeing greater uplifts than in October (5.6 % and 4.9 % respectively).

‘Revenge spending’ helps travel sector maintain double-digit growth

The travel sector again performed strongly in November, having recorded double-digit growth for 11 of the last 12 months, with sizeable uplifts at both travel agents (9.2 %) and airlines (14.0 %). This long run of growth has its roots in the pandemic, with a fifth (19 %) of consumers planning more holidays in 2024, citing that they’re still catching up on trips missed during lockdowns – a trend otherwise known as ‘revenge spending’.

Esme Harwood, director at Barclays, said: “Shoppers got into the festive spirit early this year, flocking to the high street to take advantage of month-long Black Friday sales, and unlocking long-awaited retail growth. Consumers were also keen to socialise, but prioritised more economical – and warmer – ways to catch-up with friends and family, choosing cosy nights in with takeaways or enjoying drinks at the pub instead of dining out at restaurants.

“November also marked a turning point for consumer sentiment – confidence in personal finances improved, with Brits starting to feel less concerned about some of 2023’s defining issues, such as inflation, interest rates, and food prices – so there are reasons to be cautiously optimistic as we look ahead to Christmas and the New Year.”

Jack Meaning, chief UK economist at Barclays, said: “This data suggests consumers are continuing to spend more but get less for their money, as spending growth remains below inflation. However, the gap is narrowing as the rate of price increases slows, and we expect it to narrow further in the coming months.

“It’s reassuring to see that some of the previous weakness in spending was due to unseasonal weather, as shoppers go out and finally buy that new winter coat and get in the Christmas spirit. But the key question for the UK is what happens after the holiday period – it will take more than a festive bounce to keep consumers spending in 2024.”

Overall growth figures