Consumer spending grew by 16 per cent in March with the amount spent on non-essentials reaching its highest level so far this year, according to Nationwide Building Society’s latest Spending Report.
Longer days, better weather and the fact that for the first time since March 2020 people faced no domestic legal restrictions meant that many took advantage to get out and socialise with friends, prepare for upcoming holidays, and spend money on themselves.
Data from Nationwide’s March report shows that the number of transactions made by the Society’s members during March jumped by 15 per cent compared to February - from around 190 million to just over 217 million - with a total of nearly £8.1 billion spent.
Non-essential spending reached nearly £2.8 billion in March, rising by 16 per cent, with the number of transactions exceeding the 90 million mark for the first time this year. In fact, there were 14 per cent more transactions made on non-essentials in March compared to the previous month. Holiday, airline travel and cruises spend continues to see growth as people plan for or take what may be their first trip abroad since the pandemic started.
Spending on charities also saw a significant rise in March, both compared to February (+44%) and the same period last year (+45%). This increase includes significant contributions to charities supporting Ukraine.
Essential spend also increased in March to nearly £3.5 billion – up 13 per cent on February and 11 per cent on March last year, when lockdown was still in place. Fuel and electric car charging spend is up by more than half (56%) on March last year as the Society’s spending data reflects the high price of petrol and diesel. Spending in supermarkets also saw a 15 per cent increase in March as inflation and the rising cost of food and drink continues to bite.
As expected, spend on utilities and bills continues to be higher than it was at the same point last year. Spending on credit cards is also up by nearly a third (31%) compared to March last year, and up 17 per cent on the amount spent in February.
The emerging pressure on household finances has led Nationwide to urge those who are struggling financially to get in touch with their bank or building society should they need additional support.
Non-essential spend
Non-essential spending by Nationwide members reached nearly £2.8 billion in March – up 16 per cent on February and based on nearly 95 million transactions (+14% vs February). This has been driven by increases in spending on charity, gardening, clothing, and holidays:
- Spending on charities reached £60 million in March (+44% vs February and +45% in March 2022). Much of this is likely due to people donating to the humanitarian effort due to the invasion of Ukraine.
- Gardening spend also rocketed in March (+83% vs February) as the start of spring encouraged people to venture into their gardens. Spending is, however, down 19 per cent on March 2021 as without the lockdown restrictions of last year, people are spending less time at home.
- March has seen people look to spend money to look after themselves and their bodies with health and beauty spend up 48 per cent on March 2021. The ability to be able to get out and about and socialise more than was possible last year has encouraged people to focus on looking and feeling good.
- With no restrictions in place, longer days and improving weather, eating and drinking spend was up 11 per cent on February (and +147% vs March 2021) as people met with family and friends in pubs, bars and restaurants.
|
NON-ESSENTIAL SPEND (March 2022) |
||||||
|
Spend category |
Total spend in March 2022 (£) |
% Change vs Feb 2022 |
% Change vs March 2021 |
Total transactions (March 2022) |
% Change vs Feb 2022 |
% Change vs March 2021 |
|
Airline travel |
58,041,320 |
15% |
345% |
304,524 |
20% |
456% |
|
Charities |
60,352,658 |
44% |
45% |
2,328,881 |
21% |
55% |
|
Clothing/Shoes |
196,312,192 |
21% |
58% |
4,450,216 |
17% |
67% |
|
Cruises |
9,618,007 |
17% |
505% |
28,746 |
25% |
254% |
|
Dating |
1,306,384 |
9% |
6% |
66,171 |
9% |
3% |
|
Digital Goods |
50,625,777 |
11% |
6% |
5,667,038 |
13% |
0% |
|
DIY/home improvements |
291,973,631 |
18% |
3% |
4,173,834 |
17% |
0% |
|
Eating/Drinking |
459,003,798 |
11% |
147% |
34,716,705 |
14% |
135% |
|
Gambling |
210,118,811 |
15% |
-9% |
8,561,949 |
13% |
-6% |
|
Gardening |
29,808,731 |
83% |
-19% |
862,772 |
52% |
9% |
|
General retail/dept stores |
276,860,089 |
16% |
-10% |
9,841,725 |
13% |
-16% |
|
Health/Beauty |
192,543,584 |
16% |
48% |
5,606,924 |
17% |
67% |
|
Holidays |
285,943,461 |
19% |
247% |
1,704,362 |
21% |
375% |
|
Leisure/recreation |
155,341,469 |
15% |
132% |
4,907,860 |
2% |
193% |
|
Other shops |
485,958,120 |
11% |
8% |
9,612,828 |
15% |
25% |
|
Subscriptions |
21,574,931 |
17% |
0% |
1,801,263 |
19% |
6% |
|
TOTAL |
2,785,382,964 |
16% |
37% |
94,635,798 |
14% |
45% |
Essential spend
Nearly £3.5 billion was spent by Nationwide members on essential items in March (+11% versus March 2021) with around 106 million transactions completed (+20% versus same time last year):
- Spending on fuel and electric car charging soared to nearly £290 million in March – a 56 per cent increase on March 2021 as prices at the pump have risen significantly compared to 12 months previously.
- People made more trips to the supermarket in March - the number of transactions increased by 17 per cent versus February, with spend reaching around £974 million (+15% on February) as rising inflation and the increasing cost of food and drink continuing.
- Spending on debt was 16 per cent higher compared to March 2021 as more people turn to credit to make purchases.
- Utilities and bills spend was up 10 per cent compared to March last year due to the rising cost of gas and electricity.
|
ESSENTIAL SPEND (March 2022) |
||||||
|
Spend category |
Total spend in March 2022 (£) |
% Change vs Feb 2022 |
% Change vs March 2021 |
Total transactions (March 2022) |
% Change vs Feb 2022 |
% Change vs March 2021 |
|
Childcare |
3,447,708 |
26% |
89% |
133,623 |
25% |
101% |
|
Debt |
592,454,100 |
21% |
16% |
3,101,600 |
14% |
2% |
|
Discount stores |
95,206,907 |
18% |
-4% |
4,604,547 |
17% |
8% |
|
Fuel/electric vehicle charging |
289,622,948 |
16% |
56% |
9,667,477 |
12% |
24% |
|
Insurance |
241,968,990 |
14% |
-3% |
5,059,443 |
7% |
-5% |
|
Mortgage payments |
169,916,574 |
4% |
1% |
284,651 |
4% |
-3% |
|
Motoring |
237,451,123 |
20% |
27% |
1,630,310 |
10% |
3% |
|
Pets |
45,491,656 |
14% |
8% |
992,585 |
10% |
7% |
|
Rent payments |
17,978,003 |
3% |
4% |
80,461 |
3% |
3% |
|
Supermarkets |
974,395,716 |
15% |
-1% |
54,847,346 |
17% |
18% |
|
Travel |
111,801,890 |
19% |
212% |
11,688,661 |
16% |
154% |
|
TV, phone & broadband |
273,198,891 |
18% |
0% |
8,164,710 |
19% |
3% |
|
Utilities & Bills |
425,802,231 |
-3% |
10% |
5,957,449 |
0% |
0% |
|
TOTAL |
3,478,736,736 |
13% |
11% |
106,212,863 |
15% |
20% |
Ways to pay:
The number of transactions being made using a credit card has risen 29 per cent in March compared to the same period last year as the rising cost of living perhaps leads to people needing to turn to credit. The increased number of these transactions led to a 31 per cent increase in the total amount spent.
The boom in mobile contactless as a payment method that started during the pandemic continued to play out, rising 21 per cent compared to the previous month and 154 per cent year on year.
|
WAYS TO PAY (March 2022) |
||||||
|
Total spend in March 2022 (£) |
% Change vs Feb 2022 |
% Change vs March 2021 |
Total transactions (March 2022) |
% Change vs Feb 2022 |
% Change vs March 2021 |
|
|
Debit card |
5,179,610,393 |
18% |
18% |
175,244,886 |
15% |
35% |
|
Credit card |
731,810,296 |
17% |
31% |
14,136,186 |
16% |
29% |
|
Card contactless2 |
989,796,663 |
15% |
67% |
73,189,291 |
16% |
47% |
|
Mobile payments3 |
418,401,942 |
19% |
165% |
35,622,597 |
21% |
154% |
|
Direct Debit |
2,183,133,234 |
11% |
8% |
27,703,878 |
9% |
0% |
|
TOTAL |
8,094,553,923 |
16% |
16% |
217,084,950 |
15% |
29% |
Mark Nalder, Head of Payments at Nationwide Building Society, said: “Following a slight dip in spending in February, March saw strong growth in overall spending as a result of 25 million extra transactions made during the month.
“Our data shows non-essential spending reached its highest level so far this year, which may come as a surprise given the continuing issues around the rising cost of living. However, after two years of enduring a pandemic, the combination of removed restrictions and longer days, our data indicates that people are making the most of the freedoms in 2022, whether that’s home or away.
“March also saw a significant increase in spending on charities. It’s perhaps no surprise that this has coincided with the conflict in Ukraine as people have looked to donate money to support Ukraine and the humanitarian effort.
“However, the spectre of rising costs, such as fuel, food and energy, remains and is clearly starting to bite. And with the energy price cap coming into effect in April, we can expect to see further pressure in this area going forward.
“With the current and expected future pressure on household finances, we would urge anyone who is worried about their finances to get in touch with their bank or building society to see what can be done to help them get through what might be a difficult time. We need to be conscious of how costs can creep up on us and prepare for how we might deal with them in the short, medium and potentially long term.”
- Ends -
