Furniture store card spending down in August

Consumer card spending in furniture stores declined during August when compared to last year, says new data from Barclays.

According to the latest Barclays Consumer Spending Index, which includes both debit and credit cards, furniture store spending growth declined 2% – down for an eighth consecutive month this year, while transaction growth was positive, up 3.2% against the same month last year.

Home improvement and DIY stores saw spending growth fall 4.2%, with transaction growth up 1.9%. Department stores saw spending growth increase 11.4%, with transaction growth also up by 16.5%. Discount stores saw decreases of 0.2% and 3.5% respectively.

Overall, consumer card spending grew 2.8% year-on-year in August – noticeably lower than the latest CPIH inflation rate of 6.4% and July’s growth figure of 4% – as rainy weather cast a cloud on the high street. However, entertainment provided a welcome boost, prompted by a surge in cinema ticket sales for ‘Barbie’ and ‘Oppenheimer’.

Esme Harwood, Director at Barclays, said: “The rainy weather impacted high street and hospitality venues in August, but Brits were still keen to spend on memorable summer experiences. The huge Box Office success of ‘Barbie’ and ‘Oppenheimer’ meant entertainment enjoyed another strong month, while holidays abroad boosted international travel and pharmacy, health & beauty stores.

“Shrinkflation – and now “skimpflation” – are increasing concerns for value-seeking shoppers. However, Brits’ confidence in their household finances is unwavering, suggesting they remain resilient in the face of these inflationary pressures.”

Abbas Khan, UK Economist at Barclays, said: “Muted spending growth in August is in line with other data sources, such as soft PMIs and stalling consumer confidence, suggesting that the bite from monetary tightening is starting to be felt more acutely.

However, with further moderation in inflation and strong wage growth set to support real household disposable incomes, we continue to think the economy will avoid a recession in the coming quarters, even if growth is only set to be sluggish.”

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