UK’s NatWest Group Research: Consumers Are Spending More Frequently But Also More Selectively

Customers are prioritizing spending on entertainment while cutting back on home decorating, new data from UK’s NatWest Group has revealed.

The latest debit card spending data from NatWest, “comprising the anonymized transactions of almost 10 million customers, shows recreation spending increased 10% (10.21%) in April 2024, versus the previous year.”

Average transaction values “fell 4% (3.86%), indicating customers are spending more frequently but looking to spend less per experience.”

Inflation remaining high, especially “within the services sector, partly accounts for the increase in spending. But the changes also show evidence of potential consumer behaviour shifts.”

Betting has seen a big year-on-year increase, “with an increase of 3.62% on the same month last year. The Masters, Grand National, Women’s Six Nations and World Snooker Championship all fell in this month and may have contributed towards this.”

Spending on travel and tourism is also on the rise.

Inflation has led to an increase “in prices but the data suggests customers are still keen to book a break with spend increasing 4% and with travel agents and tour operators seeing a 9.93% increase year to date.”

April itself saw travel and tourism spend volume “increase by 6% year on year, but value increased only 2% indicating a possible movement to cheaper experiences – for example booking outside peak-holiday season.”

One of the biggest areas where spend “has decreased is within retail. Home items are being cut back on by consumers with a fall of just over 17% year to date, with an average transaction in this category of just over £173, a fall of 11%.”

An unwinding of the surge in home decorating seen “in the wake of the pandemic could be playing a part in the decrease.”

Savvy shoppers might also “be switching to more affordable options, with a 20% increase in spending at second-hand shops – and almost 6% less spent on watches and jewellery versus the same month last year.”

While spending on cosmetics is up “by 9% year to date, the average transaction for a cosmetics purchase is down by just under 7%, at around £56, meaning that consumers may be economizing and trading down for cheaper brands while still prioritizing a little luxury.”

A NatWest survey of customer attitudes “found that just under half (49%) of those surveyed said they’ve had to cut back on general spending in the past 12 months.”

David Crawford, NatWest said:

“Our customers are prepared to spend more on recreation and entertainment while cutting back on their home spending – a fall of around 17% on things like TVs, sofas and decoration. From our research, we’ve also seen that almost four in five customers say they’ve tried to supplement their income over the last year, doing things like selling unneeded or unused items. Knowing that is why we’re continually improving the tools we have to help people plan and budget – as well as making their spend go further with cashback on spend through our Reward account.”

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