Consumer card spending in furniture stores declined during July 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 2.1% – down for a seventh consecutive month this year, while transaction growth remained flat against the same month last year.
Home improvement and DIY stores saw spending growth fall 4.4%, with transaction growth up 0.3%. Department stores saw spending growth increase 9.7%, with transaction growth also up by 16%. Discount stores saw decreases of 2% and 3.2% respectively.
Overall, consumer card spending grew 4% year-on-year in July – less than the latest CPIH inflation rate of 7.3% and slightly lower than in June (5.4%) – as shoppers continue to be selective about discretionary purchases. While clothing retailers fell back into decline after a surge in June, the hospitality & leisure sector received a boost as Brits spent more on getaways, eating and drinking out, and concert tickets for artists such as Taylor Swift and Foo Fighters.
Esme Harwood, Director at Barclays, said: “While July’s weather was a wash-out for clothing retailers, it was a ray of sunshine for takeaways and streaming services, which performed better than expected. Entertainment also enjoyed a huge boost, largely thanks to pre-sales for Taylor Swift’s and Foo Fighters’ upcoming stadium tours.
“With value-for-money still a major concern at the supermarket, eagle-eyed consumers are also spotting signs of “drinkflation” – “shrinkflation” on alcoholic drinks. This could be due to manufacturers making changes to their products ahead of the recent changes to alcohol duty, which mean that drinks are now taxed according to strength rather than type.”
Abbas Khan, UK Economist at Barclays, said: “Over the first half of 2023, high inflation rates have weighed on real household disposable incomes and constrained consumption. On the bright side, this headwind is expected to abate over H2 as inflation in essential categories such as energy and food is set to ease.
“However, offsetting this, more households are set to experience higher mortgage costs as they refix onto higher rates. Accordingly, while we do not expect a consumer recession in the coming quarters, growth is likely to be meagre.”