Consumer spending: June sees smallest decline since lockdown began

Consumer spending fell 14.5% year-on-year in June – the smallest decline since lockdown began.

Warm weather and the reopening of shops saw the UK economy start to recover with spending on essentials growing 6.6%.

While over half of Brits continue to avoid the shops, non-essential spend fell 22.3% which was less sharp than in May, according to data from Barclaycard (BARC.L).

Fuel spend saw an overall decline of 33.8%, compared to 49.7% the previous month as easing of lockdown measures allowed more people to travel.

Spending on home improvement and DIY was up a whopping 31% compared to May 2019, with furniture also up more than 17%.

Spending on electronics was another bright spot, with a 14.3% year-on-year increase as the return of live sport – including the Premier League and Royal Ascot – led to increased purchases of home entertainment.

And shoppers embraced sports and outdoor retailers when shops in England reopened on June 14, with spending rising by 50% the best month of the year to date.

READ MORE: Government faces £17bn public sector pension discrimination hit

And while overall spending on eating and drinking declined by 56.4% year-on-year, takeaways and fast food rose for the first time since pre-lockdown with a 5.7% yearly growth.

But customers are still cautious about returning to the high street with 56% continuing to avoid the shops.

Household confidence has also held up at 68% perhaps due to the savings people are making by staying at home rather than taking a holiday. Over half say they will spend less on holidays this summer and 30% are not expecting to go away at all.

Esme Harwood, director at Barclaycard, said: “While shoppers remain understandably cautious, slowly but surely Brits are starting to spend again. The recent VAT cut and meal vouchers are also a positive sign for the hospitality industry and it will be interesting to see how these measures impact consumer spending.

“It also seems shoppers are generally reassured by retailer efforts to take precautions and make their stores safer. As lockdown eases and Brits are encouraged to enjoy summer safely, it’s clear that people are making the most of a sense of normality again.”