Growth in spending on credit and debit cards slowed in January as Plan B Covid restrictions and rising living costs hit retail, leisure and hospitality, compared to previous months, says a recent report by Barclaycard.
According to new figures from Barclaycard, consumer card spending rose meagerly by 7.4 percent in January compared to the same period in 2020. This was the smallest uplift since April 2021.
Spending on essential items grew 10.4 percent- the smallest rise in nine months. Face-to-face retail spending, excluding groceries, declined 8.5 percent.
Barclaycard cites consumers shifting their spending to food and drink specialist retailers — up 67.3 percent — such as butchers, bakeries and recipe box services, as Britons chose to shop locally due to the work-from-home guidance and re-started meal kit subscriptions after the Christmas break as a reason for the growth.
Pharmacy and health & beauty retailers also remained strong (12.8 percent) as shoppers invested in self-care to beat the January blues.
Barclaycard said the vast majority of consumers (89 percent) say they are concerned about inflation and their household finances.
Brighter spots included an indication that 31 percent of consumers now feel confident that the vaccine booster roll-out will allow them to increase the time they spend shopping in-store.
Experts at Barclaycard said that while these economic headwinds are likely to persist over the coming months, a boost can be expected from Valentine’s Day shopping, international tourism and Brits spending more on experiences.
Jose Carvalho, head of consumer products at Barclaycard, said that although Covid restrictions had “clearly impacted consumer spending levels in January”, things should now improve.
“The lifting of Plan B restrictions should also provide a welcome boost to many sectors, as workers travel back into the office and socialise over post-work drinks, while businesses will likely start to see the benefits of increased inbound tourism on retail sales too,” he added.