Thursday 10 January 2019 9:55 am | Updated: Monday 03 June 2019 2:32 am

Essential consumer spending slows as shoppers balance Christmas budgets

Essential consumer spending growth in December fell to the lowest rate in more than two years as shoppers attempted to balance Christmas budgets.

Spending on essential goods grew 1.8 per cent year-on-year last month, representing a contraction in real terms, according to data from Barclaycard.

Clothing spending fell by three per cent and expenditure in department stores fell by 6.3 per cent during December.

Non-essential expenditure rose by two per cent boosted by festive spending in pubs, which saw an increase of 12.9 per cent, and restaurants, which rose by 9.1 per cent.

More than half of Brits said they wanted to support their local high street and 38 per cent said they are choosing the high street over online only retailers.

However, one in two consumers plan to cut back in January to cover the cost of Christmas and 48 per cent of shoppers said they were less confident about their personal finances than they have been for years.

Shoppers are expecting price increases over the next three month with the cost of fuel, household utilities and groceries anticipated to rise.

Barclaycard director Esme Harwood said: “Growth in consumer spending dropped to its lowest level since 2016 and represents a decline in real terms.

“Many Brits were more modest in their approach to Christmas spending compared to 2017, cutting back on the essentials to balance the costs of the festive season.

“Despite a desire to support their local high street, Brits expect to cut back in January and remain cautious amidst ongoing economic uncertainty.”