Britons cut costs on essential spending to fund luxury purchases

Britons cut back on buying 'essential' items last month but splurged on treats like Oasis tickets, according to new data.

Barclays' consumer spend report, which analyses millions of customer transactions, reveals overall spending increased 1.2 per cent annually in September.

The biggest increase came from 'non-essential' spending at 2.7 per cent, as discounts incentivised shoppers to splash the cash on clothing, health and beauty.

Clothing spend increased 23.6 per cent monthly and 4.5 per cent annually, its highest growth since July 2022.

A quarter of shoppers say they are prioritising new clothes and accessories, spending an average £73.

Department stores saw their biggest boost since August 2023 with shoppers spending 5.5 per cent more last month.

The numbers suggest households are feeling more confident in their finances off the back of the cost of living crisis, with half saying there are treats and luxury purchases they continue to buy, even when cutting back on other items.

It was a strong month for entertainment, which increased 14.4 per cent to reach a 14-month high, buoyed by the release of tickets to the long-anticipated Oasis reunion.

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Spending on the day of general release was six times the rest of the month's average daily spend.

It was the highest uplift recorded since July 2023, when the pre-release window for Taylor Swift's Eras Tour triggered a surge in spending.

The Barclays report found that a fifth of those prioritising treats, spend on theatre and gig tickets.

Subscriptions to streaming platforms remain popular among consumers looking to save their cash with 'insperiences' in the colder months. Spending was up 10.6 per cent over the month.

Meanwhile cinemas saw growth of 18.2 per cent in the month, amid the success of blockbusters such as Beetlejuice Beetlejuice, Deadpool & Wolverine and It Ends With Us.

By contrast, pubs, bars and clubs saw limited a drop in growth from 3.2 per cent in August to 0.6 per cent in September.

As well as the weather likely being a factor, 40 per cent said they were cutting back on drinking out to save money.

Consumers are also scaling back on essential items, with spending down 1.7 per cent, and groceries seeing their first fall since June (-0.8 per cent).

The report found 70 per cent of consumers continue to look for ways to get more value from their shop or reduce their spending, higher than the 67 per cent yearly average.

Karen Johnson, head of retail at Barclays, said: 'Retail's recovery emerged as a bright spot in September, despite there being colder weather and darker evenings on the horizon.

'While shoppers' remain cost-conscious, it's clear they're responsive to retailers' promotional activity. Discerning shoppers are also finding room for treats and little luxuries within their budget, demonstrating that consumers are prioritising spending on things that bring them joy.

'While many are anticipating a costly Christmas, there are encouraging signs that people feel confident in their ability to manage their household finances and take control of their festive spending.'

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