November spending stays strong as cost of living fails to thwart Brits from gearing up for Christmas

A strong Black Friday saw discretionary costs rise in November versus October although overall spending was broadly flat, according to Nationwide Building Society’s monthly Spending Report.

Despite many retailers beginning their discounts well in advance of Black Friday (25 November), the day accounted for circa five per cent of all the transactions made by Nationwide members during the month as the nation hit the shops and went online in a bid to grab a bargain ahead of Christmas. This equated to around seven per cent of the month’s overall consumer spending.

Rising discretionary spending combined with stable essential spending means that year-on-year growth is up by seven per cent from six per cent in October. The amount spent on essentials (+9%) and non-essentials (+8%) was higher than November 2021, reflecting both the increased prices of goods and services and, despite cost-of-living challenges, a desire to enjoy the first ‘normal’ Christmas with no restrictions for three years.

Nationwide’s latest monthly Spending Report¹ analysed around 230 million debit card, credit card and Direct Debit transactions made by the Society’s members between 1 and 30 November.

With the festive season fast approaching, there was an uptick in spending (+2% vs October) on non-essential items as people took advantage of discounts in store and online to purchase items needed for Christmas. And while overall spending on essential costs was broadly similar to that in October, the annual growth can be attributed to the increased spending this year on utilities and bills (+17%), fuel and electric car charging (+17%), mortgage payments (+12%) and rent payments (+9%). Childcare remains elevated with spending up 29 per cent on November 2021.

Non-essential spending overview:

More than £3 billion was spent on non-essential items in November – a two per cent increase on October and eight per cent higher than in November last year as people took advantage of Black Friday discounts across retailers to purchase items for Christmas.

• Spending on clothing and shoes was up by more than a fifth (+22%) compared to October and nine per cent higher year-on-year as people look to purchase gifts for family, friends and themselves and gear up for the start of the festive party season.
• Christmas presents are likely to be the primary reasons behind the uptick in spending on health and beauty during November (+12% vs October and +8% year-on-year).
• The Black Friday discounts are likely to have encouraged people in store and online as spending in general retailers and department stores (e.g. John Lewis, M&S, Selfridges) rose 18 per cent month-on-month. Other shops, such as antique shops, arts & crafts stores, florists, jewellery stores and record stores also saw an eight per cent monthly growth.
• With winter setting in and the football World Cup encouraging more people to stay at home, it’s perhaps no surprise to see spending on eating and drinking out fall by nine per cent month-on-month. However, spending remains nine per cent higher than November 2021, reflecting rising costs of eating and drinking out.
• The recent trend of cutbacks being made on subscription services, such as Netflix, Amazon Prime, magazines and wine, as well as on dating sites and apps, Both ‘Subscriptions’ and ‘Dating’ categories saw both a month-on-month and annual fall as people stop the things they can do without.

Essential spending overview:

At £3.77 billion – the total spending on essential items in November was around the same as seen in October, although nine per cent higher than last November, reflecting how much bills have risen over the last 12-month period.

• The number of transactions made in discount stores was up 10 per cent on October, with spending up 27 per cent month-on-month. This perhaps reflects the challenges people are facing with the cost of living and the want to get things at the cheapest price possible.
• Childcare spending continues to be much higher than last year as costs continue to increase. Spending was up nearly a third (29%) in November compared to the same period last year, although down five per cent on October.
• Spending to pay off existing debt was down five per cent month-on-month (+3% vs November last year) as people are likely to have diverted spare money towards festive purchases.
• Although there was a small drop (-1% vs October) in fuel and electric car charging spend, it remained significantly higher than November 2021 (+17%) as cost of fuel continues to bite people at the pump.
• Supermarket spend saw an uptick (+2% month-on-month) in November as people begin to fill the cupboards and fridges and freezers in preparation for Christmas celebrations. But at nine per cent higher than November 2021, it’s a clear indication of how costs of food and drink have increased and played a significant role in inflation levels.
• Costs associated with living in a home continue to be higher than 12 months before with the amount spent on rent payments (+9%) and mortgage payments (+12%) above what they were in November last year.

Mark Nalder, Payments Strategy Director at Nationwide Building Society, said: “Over the years, spending has been broadly similar across October and November. However, Black Friday plays a significant role in driving sales, particularly on the days surrounding the event. Spending on 25 November accounted for around seven per cent of the total amount spent across the whole of the month.

“Spending on clothing, beauty and department stores saw a monthly uptick as consumers scoured online and on the high street to purchase presents for friends, family and themselves. Perhaps most interesting was the surge in both transactions and spending in discount stores as the rising cost of living pushes people to search for better value. As a result of people looking for deals ahead of the festive period, there’s a chance that many have already got most of what they need. This may mean that spending in December may not be as high as previous years.”

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