July consumer card spending grows as live entertainment summer socialising boost hospitality and leisure

Abbas Khan, UK economist at Barclays, said: “Over the first half of 2023, high inflation rates have weighed on real household disposable incomes and constrained consumption. On the bright side, this headwind is expected to abate over H2 as inflation in essential categories such as energy and food is set to ease.

“However, offsetting this, more households are set to experience higher mortgage costs as they refix onto higher rates. Accordingly, while we do not expect a consumer recession in the coming quarters, growth is likely to be meagre.”

Spending on supermarkets rose considerably less in July (5.2 per cent) than in June (9.8 per cent), as the rate of food price inflation continued to slow after peaking in March. However, concern around rising food prices remains high at 91 per cent, leading 70 per cent of shoppers to look for ways to reduce the cost of their weekly shop – the highest percentage so far this year.

Of these value-seeking Brits, 13 per cent say they are having to remove some items at the checkout to avoid going over budget. To help save money, more than a third (35 per cent) are buying items in bulk because they cost less in the long-term, and four in 10 (41 per cent) are shopping at multiple supermarkets to source a range of deals.

Concerns around food prices and the rising cost of living are also impacting economic confidence as just one-in-five (21 per cent) report feeling confident in the strength of the UK economy, down two per cent month-on-month in July.

Meanwhile, “shrinkflation” continues to impact grocery shoppers. A slightly higher proportion of Brits had noticed examples of “shrinkflation” in July (73 per cent) compared to June (70 per cent), with chocolate (56 per cent), crisps (49 per cent) and packets of biscuits (46 per cent) remaining the products most frequently cited as being impacted by this growing trend. As a result, a fifth (21 per cent) of the shoppers who have noticed signs of shrinkflation are switching to brands which haven’t changed the size of their products.

“Shrinkflation” is also affecting alcoholic drinks: more than one in five Brits (22 per cent) have noticed that some of the alcoholic drinks they buy – such as beers, spirits and tinned cocktails – have become weaker or contain less alcohol, yet still cost the same or more than they used to, otherwise known as “drinkflation”.