The latest consumer spending figures from Barclaycard have shown that, following a lull in December, record expenditure on essential items drove a 4.4% uplift in consumer spending in January.
The data suggested inflationary pressures led to spending on essentials rising by 5.8%, (the highest level since Barclaycard started reporting on consumer spending in 2012).
The rise was fuelled by double-digit growth in petrol spending (15.3%) and the highest growth in supermarket spending in two years (2.9%).
Entertainment spending was down, but the prevailing air of caution among households helped discount stores buck the trend, with sharp growth of 10.5% – the first double-digit increase in this category, which has been particularly strong over the last two years, since the results of the EU referendum. “This suggests a tightening of purse strings across non-essentials drove consumers to seek more value in everyday purchases,” said Barclaycard.
Two-thirds (66%) of consumers said they were now more careful to seek out value for money when making purchasing decisions. This sits within a broader fall of perceived spending power, with just over half (54%) of Brits saying they were confident in their household finances, down from 67% who said the same 12 months ago.
Paul Lockstone, managing director at Barclaycard, said: “January’s uplift in spending represents a strong start to the year. Big increases in the amount spent at supermarkets and on petrol, coupled with careful spending across a number of non-essential categories, however, does suggest that consumers are starting to feel the impact of inflation on their everyday lives.”