Tuesday 11 February 2020 12:01 am

Consumer spending bounces in January but high street woes continue

Brits ramped up their spending in January after a thrifty December, according to new data, in the latest sign that the UK economy may have bounced back at the start of 2020.

Consumer spending grew 3.9 per cent in January, data from payment provider Barclaycard showed today, up from the one per cent growth witnessed during a lacklustre Christmas period the previous month.

Read more: UK consumers abandon high street for retail parks and shopping centres

Britons splashed 22 per cent more cash on cinema tickets in January month on month, as they were pulled to the silver screen by Sir Sam Mendes’s World War One epic 1917.

Higher prices at the petrol pump also drove up the figure, with fuel spending rising 4.3 per cent.

Winter weather stopped consumers venturing to restaurants, where spending fell 3.5 per cent. Instead, Britons curled up on the sofa with pizza and curry, with spending on takeaways rising 11.4 per cent.

However, separate data today showed that the UK high street did not benefit from the increased consumer spending described by Barclaycard.

Retail sales – which does not include consumer sub sectors like entertainment and digital subscriptions – rose by just 0.4 per cent in January, according to the British Retail Consortium and KPMG.

Esme Harwood, director at Barclaycard, said: “Consumer spending has had a boost in January, and we’ve also seen confidence in the economy grow.”

“Traditional retail continues to face challenges though. How retailers respond to consumer demand for value for money and responsible shopping will be key.”

Last year was labelled “worst year on record” for retailers by the BRC, as consumer confidence was dented by Brexit uncertainty and shop-owners described rising pressures from costs such as business rates.

A weak December capped off 2019, with retail under-performing expectations and contracting, marking the longest period since 1957 in which the shopping sector has failed to grow.

However, Barclaycard said consumer confidence was on the rise in January, with four in ten consumers upbeat about the country’s economic prospects, the most positive figures reported since in more than three years.

Paul Martin, UK head of retail at KPMG, said: “With Brexit technically behind us, retailers will be hoping that consumers feel confident enough to re-engage. But much remains unknown as we work towards defining our future relationship with the EU.”

Read more: Retail property market misses out on ‘Boris bounce’

Both Barclaycard and the BRC/KPMG reports said that more environmentally-conscious consumers were changing the way they shop.

Barclaycard said 56 per cent of shoppers the firm spoke to have become more conscious of their personal impact on the environment and consequently intend to change their behaviour. A third of shoppers also plan to buy fewer plastic goods.