Consumer spending rose 3.7% in April but budget buys are still on top.
April was a mixed month for retailers according to Barclaycard, with consumer spending rising 3.7% but the average price of each transaction falling by 5%.
UK customer spending rose by 3.7% year-on-year largely due to warmer weather and later Easter holiday giving consumers some much-needed shopping time.
However, the average monetary value of each transaction fell by 5%, with discount and budget retailer still demanding the majority share of customer loyalty. Barclaycard, which processes nearly half of all the UK’s debit and credit card transactions, believes this value indicates that consumers are yet to see the improving state of the economy impact on their own finances.
Strong growth was seen at department stores (4.1%) as people focused their spending on updating their summer wardrobes. In the women’s clothing category, spending increased by a staggering 41%.
In-store vs. online spending
In-store spending increased by 3.1% overall. With more consumers hitting the high street, online spending suffered slightly in April and though it saw growth of 5.8%, this was down from 6.4% in March and the lowest level seen this year.
The great British bargain hunt
However, data strongly suggest that consumers remain cautious and continue to search for value in every shopping trip they make, pushing down average transaction values. They are also switching to cheaper alternatives where possible to save money – the Barclaycard Value Index shows spending on discount retailers was up 29.8% in April compared to last year.
Overall total spending in London saw the biggest increase of 4.4%, with the Yorkshire and Humber region bringing up the rear with 2.6%.
Chief executive officer of Barclaycard Val Soranno Keating said: “Though many economic indicators continue to paint a positive picture and the talk is of a recovering economy, the improvements are yet to trickle down and positively impact on household budgets. While the growth in spending in April is encouraging, this is as likely to reflect the better weather and the long Easter weekend as any improvement in the economy.”