June’s mixed weather hinders the high street, but boosts takeaways, subscriptions and entertainment

by Admin
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  • Card spending fell for the first time since February 2021, as retailers were hampered by cold weather early in the month 
  • Consumer cutbacks and falling food price inflation meant supermarket shopping saw its first decline since June 2022 
  • Brits spent more on takeaways and digital content, as they tuned into series like ‘Bridgerton’ from the comfort of home and “streamflation” took effect
  • Entertainment businesses performed well and cinemas enjoyed their busiest day of the year on 15th June thanks to the release of Disney and Pixar’s ‘Inside Out 2’
  • The Barclays Consumer Spend report combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending

Consumer card spending fell -0.6 percent year-on-year in June – the first decline since February 2021 and significantly lower than the latest CPIH inflation rate of 2.8 percent – as colder weather early in the month hampered spending at clothing stores, pubs and garden centres. However, the combination of cooler temperatures and new TV releases such as ‘Bridgerton’ and ‘House of the Dragon’ boosted digital content and takeaways, while ‘Inside Out 2’ provided cinemas with a 122.4 percent boost on the weekend of its release.

The cold in early June 2024, in contrast to 2023’s sunshine and warm weather, meant that retail spending fell by -2.6 percent – its most significant year-on-year drop since June 2022 (-3.8 percent). High street cutbacks meant in-store spending (excluding groceries) was down -5.1 percent, while clothing sales declined -7.7 percent year-on-year.

This comes as two in five (39 percent) Brits said they have spent less than usual on summer products this year, due to the weather, with clothes (55 percent) emerging as the most common cutback, followed by barbecue food and equipment (40 percent). Consumers also delayed home and garden renovations due to the cold snap, as spending on home improvements and DIY declined -9.4 percent, while garden centres saw a steeper drop of -12.7 percent.

Supermarket shopping slows                                     

Supermarket spending recorded its first decline (-2.6 percent) in two years, which comes as the majority of consumers (65 percent) say they’re cutting back on their weekly grocery expenditure. Over half (52 percent) of these budget-conscious shoppers are looking out for loyalty scheme discounts and supermarket deals.

The slowdown can also be attributed to the drop in food price inflation, which has now fallen to its lowest level since October 2021 at 1.7 percent. Encouragingly, over a third (36 percent) of shoppers say they have noticed food prices have been rising at a slower rate in recent months.

“Insperiences” receive ‘Bridgerton’ boost, while The Euros prop up pubs

The gloomy weather did result in a positive month for “insperiences” (at-home experiences), up 5.3 percent overall, helped by takeaways and fast food returning to growth (4.4 percent) after declining in May (-0.2 percent). Meanwhile, spending on digital content and subscriptions rose by 9.2 percent, due to “streamflation” (the rising price of streaming subscriptions) taking effect, combined with the popularity of new series such as ‘House of the Dragon’ and ‘Bridgerton’.

Pubs, bars and clubs saw modest year-on-year growth in June (up 0.5 percent), with the influx of sports fans watching The Euros outweighing the bad weather, and keeping the category on par with its strong performance in June last year.

However it was a tougher month for restaurants, which declined -11.5 percent year-on-year, although this was an improvement on last month (-15.7 percent), reflecting the selective approach cost-conscious consumers are taking to discretionary spending; over half (52 percent) of those cutting back on non-essential spending are choosing to spend less on eating out at restaurants.

Brits still jet-setting and joy-seeking

The entertainment and travel sectors also enjoyed growth in June, mirroring new data from Barclays’ ‘All to play for: winning with experience’ report which revealed that experiences like travel and live entertainment are now taking up a greater share of Brits’ discretionary spending.

Entertainment rose 6.1 percent, while cinemas enjoyed their busiest day of the year so far on 15thJune, up 122.4 percent in comparison to the average day in 2024, after the release of ‘Inside Out 2’ . Meanwhile, spending on holidays abroad continued to grow, with travel agents and airlines up 5.5 percent and 3.2 percent respectively, as some holidaymakers settled the final costs for their getaways. Overseas travel outpaced staycations, demonstrated by domestic hotels, resorts and accommodation recording a decline of -1.8 percent.

This comes as 37 percent of Brits say that when they go on holiday, they tend to spend more than they had planned to, while a fifth (20 percent) adopt a “treat yourself” attitude when travelling.

Consistent consumer confidence 

Encouragingly, while Brits maintain a steady approach to managing their budgets, consumer confidence showed signs of recovery compared to the previous month. Consumers feel more optimistic about their ability to live within their means (up to 73 percent) and spend more on non-essential items (56 percent), while confidence in job security increased four percentage points to 49 percent. Meanwhile, concerns about inflation fell by one percentage point, to 85 percent, while concerns about the rising cost of fuel eased, as spending on fuel declined -3.2 percent.

Karen Johnson, Head of Retail at Barclays, said: “Once again, our data demonstrates the undeniable impact that unseasonable weather can have on consumer spending. The sluggish demand at the start of June even caused some fashion brands to adjust their sales schedules, although I was pleased to see that the situation has since improved with the arrival of sunnier days.

“However, the dreariness didn’t dampen spending across the board, with takeaways, digital content and entertainment all benefitting from people sheltering at home, and hopefully we’ll see sustained interest in The Euros – regardless of England’s fate – and sunnier weather driving people to their local in July.”

Image courtesy of Unsplash. Photo credit: Clark Street Mercantile.

 

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