Consumers spent 10 percent more on credit and debit cards in 2022 compared to last year | Personal Finance | Finance

However, spending on essential items also grew by 6.3 percent – thanks to a 28.3 percent rise in fuel spend, driven by surging petrol and diesel prices and increased car use as life returned to normal post-pandemic.

Meanwhile, the cost-of-living squeeze meant overall retail spend was down compared to 2021.

These insights emerged from Barclaycard’s monthly Consumer Spending Index, which combines customer transactions on debit and credit cards with consumer confidence data.

Esme Harwood, at Barclaycard, said: “The lifting of all Covid restrictions meant card spending was up overall compared to last year.

“Hospitality, leisure, and travel all received a boost as Brits made up for lost time by socialising with friends and jetting off on holidays.

“However, the cost-of-living squeeze has clearly impacted the retail sector.”

The data also showed surging energy prices caused purse strings to tighten – with the average customer spending 32.9 percent more on utilities than last year, based on credit and debit card transactions, as well as direct debits.

As a result, Brits became more worried about the impact of rising household bills on their personal finances – with 92 percent now expressing concern about this, up from 86 percent last year.

The retail sector overall saw a five percent increase in the total number of card transactions – however, the total amount spent was down nearly one percent as customers opted for smaller baskets.

And as shoppers returned to stores, face-to-face retail spending rose by 8.3 percent, but online retail spending declined by -12.2 percent.

Face-to-face spending at supermarkets was also up 2.1 percent, while online spending fell by -12.8 percent.

But despite the rising cost-of-living, spending on groceries was down -0.1 percent, as consumers looked to reduce the cost of their food shop.

The lifting of all Covid-19 restrictions meant pubs, bars, and clubs recorded growth of 37.1 percent and 53.6 percent, respectively.

The reopening of live event venues also gave the entertainment sector a sizeable 41.1 percent boost.

The reduction in working from home, and the return of holidays and nights out, also corresponded with people investing more in their appearances.

Pharmacy, health, and beauty retailers saw noticeable growth compared to 2021, as well as clothing and department stores (14.7 percent, 11.2 percent, and 7.4 percent, respectively).

And as holidaymakers booked more getaways abroad, large increases were seen by travel agents (190.6 percent) and airlines (132.1 percent) – although staycations were still popular, with hotels, resorts, and accommodation seeing an uplift of 27.5 percent.

But not every sector fared so well from the end of restrictions – as spending on home improvements fell by -5.5 percent, and digital content and subscriptions saw a decline of -0.8 percent.

Esme Harwood added: “Consumers have had to rein in spending on purchases like subscriptions and home improvements, as well as reduce their basket sizes in general.

“As these inflationary pressures continue, all categories are likely to face further headwinds in 2023.

“However, I am optimistic that both consumers and businesses will continue to find ways to adapt and cope with these challenges, as they did throughout the pandemic.”

Also commenting on the findings, Harry Wallop, Retail Expert and Commentator, said: “2022 has been a contrasting year for retail and consumer spending.

“On one hand, the pent-up demand from the pandemic for trips abroad and evenings out has given a sizeable boost to some key sectors.

“In turn, this has had a positive impact on categories such as clothing, and health and beauty.

“On the other hand, consumers are increasingly conscious about the cost of the items they’re buying, and many are changing their behaviours to monitor their outgoings.

“As we head into next year, it’s likely that Brits will remain in a similar mindset – keen to conserve their cash where possible, but also happy to splash out on items and experiences that give them a boost once in a while.”