UK consumer spending rose above pre-pandemic levels in April for the first time this year, buoyed by many sectors reopening and older people booking holidays, according to payments card data.
Spending rose 0.4 per cent in April compared with the same period in 2019, up from a 7.2 per cent contraction in March and the first expansion this year, according Barclaycard, which tracks nearly half of all UK credit and debit card transactions.
Raheel Ahmed, head of consumer products at Barclaycard, said the reopening of non-essential stores, the hospitality sector and sports venues provided a “promising” boost to many sectors in April.
UK gross domestic product figures released on Wednesday are expected to show the economy grew in March, and spending data for April points to the pace of expansion accelerating strongly.
Barclaycard data showed that sports and outdoor equipment and furniture retailers registered growth rates above 25 per cent in April compared with the same period in 2019, while home improvement and DIY stores continued to report strong growth.
Spending on resorts and accommodation rose 1.6 per cent boosted by older consumers for whom growth topped 15 per cent compared with April 2019 “as they organise family staycations”, said Ahmed. Yet, spending was still down from pre-pandemic levels when including hotels.
The contraction in spending in clothing stores eased to a 6.6 per cent drop compared with April 2019, from a 29 per cent fall in the previous month. Younger consumers were the most eager to revamp their wardrobes with a 2 per cent expansion among those aged 16 to 24.
With dining limited to outdoors and widespread cold weather, there was only a moderate improvement in spending in the hospitality sector. This was particularly true for restaurants, where spending was down 74 per cent compared with April 2019, after registering an 83 per cent drop in March.
However, a third of people said they were willing to spend extra money on entertainment and leisure activities such as drinks or meals out compared with before the pandemic, according to a monthly survey run by Barclaycard, pointing to an improvement when restrictions are eased further next week.
The figures chime with those from the advisory services firm KPMG and the British Retail Consortium, an industry body, that showed retail sales up 7.3 per cent in April, compared with the same month in 2019.
This was above the three months average of 6 per cent and up from a 3.4 per cent contraction in January.
Paul Martin, UK head of retail at KPMG, said that retailers “will be delighted with the way the reopening of the high street was greeted by shoppers eager to get into stores and engage once more with physical shopping”.
Helen Dickinson, chief executive at the British Retail Consortium, confirmed strong increases in outdoor wear and furniture sales, and said that with consumers back to stores, non-food sales across stores and online increased by a quarter between March and April.
“It is great to see customers feeling confident visiting shops, a testament to the ongoing investment by retailers in making their stores, warehouses and deliveries Covid-secure,” she said.
