Consumer spending in May reached its highest for the year as essential and non-essential spending saw month-on-month and annual increases, Nationwide Building Society’s Spending Report1 reveals.
While spending has risen for a range of essential costs, including utilities, travel and fuel, the biggest recorded rises were for holidays, travel, clothes and gardening, as the warmer weather drives households to spend ahead of the summer.
Overall, April’s spend nudged up by three per cent, while there were around 14 million more transactions made (a total of around 226.5 million transactions made compared to 212 million in April). Spend was up 13 per cent on the same month last year when the UK was easing out of Covid-19 restrictions.
Essential spending: More than £3.7 billion was spent on essential items by Nationwide’s members in May – a seven per cent increase on April and a 15 per cent rise on May last year. Transaction numbers were also up seven per cent in May compared to April. Unsurprisingly, fuel and electric car charging spend is up 29 per cent on the same time last year, while spending on utilities and other bills rose 24 per cent on May 2021 – both reflective of the current high fuel and energy costs. The average transaction value for fuel and electric car charging was £29.83 – a 17 per cent increase on last year.
Spending on childcare (+27% vs April) and paying off existing debt, such as credit cards and personal loans (+16% vs April) saw the biggest growth during the month. Reflective of rising inflation, supermarket spending rose by four per cent, but perhaps more telling was that spending in discount stores rose by nine per cent in May, compared to April as people look to make their money stretch further when they are shopping for food, drink and other household items.
Non-essential spending: Nationwide members breached the £3 billion mark for the first time this year in May – based on around 101 million transactions (the first time this year that there had been more than 100 million non-essential transactions). Holidays (+16% vs April; +127% vs May 2021) and airline travel (+16% vs April; +313% vs May 2021) continue to be areas where spending levels are holding up as people look to try and enjoy a holiday either home or abroad. The better weather and higher prices for goods is also likely to have an impact on the increase in spending on gardening (+17% vs April) and clothing and shoes (+12% vs April), as people look to enjoy pottering in the garden or refreshing their wardrobe for summer holidays and socialising.
There were some areas where spending remained fairly flat month-on-month, including DIY and home improvements (0%), digital goods, such as console games and e-books (+2%) and dating (+3%).
Essential spend overview
- Spending on utilities and bills in May rose by 24 per cent compared to last year as rising energy bills continue to bite into household finances. There was also a six per cent month-on-month increase perhaps continuing to reflect the new price cap which came into force in April.
- With fuel costs continuing to rise, there was a further monthly increase in spending on fuel and electric car charging – up 29 per cent compared to last year and six per cent versus April.
- The amount spent to pay off existing debt, such as credit cards and personal loans, saw a 16 per cent increase compared to April as people attempt to use what spare money they have to reduce their debt levels. Spending is also 40 per cent higher than last year, which suggests that people have more debt now to pay off.
- While smaller in scale than other categories, spending on childcare rose again in May to more than £3.3 million – an increase of 27 per cent versus April. This follows a drop of 23 per cent month-on-month in April, likely due to the Easter break.
|
ESSENTIAL SPEND (May 2022) |
||||||
|
Spend category |
Total spend in May 2022 (£) |
% Change vs April 2022 |
% Change vs May 2021 |
Total transactions (May 2022) |
% Change vs April 2022 |
% Change vs May 2021 |
|
Childcare |
3,383,036 |
27% |
54% |
127,741 |
39% |
52% |
|
Debt |
616,513,274 |
16% |
40% |
3,129,552 |
11% |
22% |
|
Discount stores |
102,249,512 |
9% |
-3% |
4,661,443 |
7% |
2% |
|
Fuel/electric vehicle charging |
301,965,726 |
6% |
29% |
10,123,400 |
7% |
10% |
|
Insurance |
229,324,439 |
5% |
6% |
4,999,244 |
5% |
8% |
|
Mortgage payments |
174,185,599 |
3% |
12% |
293,595 |
4% |
9% |
|
Motoring |
213,151,619 |
4% |
-18% |
1,545,638 |
2% |
3% |
|
Pets |
45,396,632 |
4% |
7% |
1,002,933 |
4% |
4% |
|
Rent payments |
19,117,371 |
5% |
18% |
83,707 |
5% |
15% |
|
Supermarkets |
1,008,725,374 |
4% |
4% |
56,547,249 |
7% |
16% |
|
Travel |
122,510,499 |
10% |
80% |
12,419,865 |
9% |
49% |
|
TV, phone & broadband |
269,461,418 |
7% |
12% |
7,671,900 |
7% |
9% |
|
Utilities & Bills |
633,724,889 |
6% |
24% |
7,237,881 |
3% |
9% |
|
TOTAL |
3,739,709,389 |
7% |
15% |
109,844,148 |
7% |
16% |
Non-essential spend overview
- Spending on gardening continues to bloom as the weather improves. During May, more than £38 million was spent – an increase of 17 per cent on April.
- £248.5 million was spent on clothing and shoes in May. This was an increase of 12 per cent compared to April and 15 per cent higher year-on-year.
- Holidays and airline travel continue to be areas that are holding up with both seeing a 16 per cent increase in spending month-on-month, indicative of people looking for a last-minute getaway in the coming weeks.
- The amount spent on eating and drinking out grew by eight per cent in May compared to April.
- DIY and home improvements in May fell by 10 per cent on the same time last year, although remained flat compared to the previous month as people focused less on improving their homes at a time when household finances are squeezed. Spend on dating apps in May was down six per cent on last year and only three per cent up month-on-month.
|
NON-ESSENTIAL SPEND (May 2022) |
||||||
|
Spend category |
Total spend in May 2022 (£) |
% Change vs April 2022 |
% Change vs May 2021 |
Total transactions (May 2022) |
% Change vs April 2022 |
% Change vs May 2021 |
|
Airline travel |
65,472,422 |
16% |
313% |
351,659 |
13% |
314% |
|
Charities |
48,903,319 |
-4% |
0% |
2,291,767 |
3% |
11% |
|
Clothing/Shoes |
248,585,112 |
12% |
15% |
5,611,943 |
15% |
13% |
|
Cruises |
13,673,170 |
16% |
347% |
47,712 |
23% |
228% |
|
Dating |
1,210,430 |
3% |
-6% |
50,097 |
-4% |
-24% |
|
Digital Goods |
49,023,650 |
2% |
12% |
5,722,954 |
5% |
11% |
|
DIY/home improvements |
285,218,076 |
0% |
-10% |
4,231,295 |
3% |
-2% |
|
Eating/Drinking |
525,126,872 |
8% |
38% |
38,300,273 |
9% |
43% |
|
Gambling |
214,266,563 |
-1% |
-4% |
8,692,193 |
-2% |
3% |
|
Gardening |
38,296,661 |
17% |
3% |
1,093,689 |
17% |
10% |
|
General retail/dept stores |
290,563,428 |
10% |
1% |
10,152,515 |
8% |
-7% |
|
Health/Beauty |
191,582,127 |
6% |
8% |
5,753,788 |
5% |
19% |
|
Holidays |
349,192,483 |
16% |
127% |
2,135,550 |
10% |
97% |
|
Leisure/recreation |
169,016,015 |
4% |
27% |
5,653,959 |
3% |
43% |
|
Other shops |
496,992,801 |
8% |
8% |
9,368,790 |
5% |
8% |
|
Subscriptions |
20,266,943 |
4% |
0% |
1,658,247 |
5% |
4% |
|
TOTAL |
3,007,390,072 |
8% |
20% |
101,116,431 |
7% |
20% |
Ways to pay:
Given rising inflation and the difficulties facing many with the cost of living, people are having to turn to credit to pay for goods and services. According to Nationwide’s data, spending on credit cards grew in May – up six per cent on April and 22 per cent on the same period last year. However, spending on debit cards remained flat in May and was only seven per cent up on last year.
|
WAYS TO PAY (May 2022) |
||||||
|
Total spend in May 2022 (£) |
% Change vs April 2022 |
% Change vs May 2021 |
Total transactions (May 2022) |
% Change vs April 2022 |
% Change vs May 2021 |
|
|
Debit card |
5,161,217,128 |
0% |
7% |
182,733,595 |
7% |
18% |
|
Credit card |
771,684,892 |
6% |
22% |
15,227,734 |
6% |
18% |
|
Card contactless2 |
1,074,292,384 |
6% |
37% |
77,259,740 |
6% |
18% |
|
Mobile payments3 |
487,348,732 |
12% |
99% |
39,676,452 |
14% |
97% |
|
Direct Debit |
2,460,835,279 |
8% |
25% |
28,540,053 |
6% |
11% |
|
TOTAL |
8,393,737,299 |
3% |
13% |
226,501,382 |
7% |
17% |
Mark Nalder, Head of Payments at Nationwide Building Society, said: “Our data shows that consumer spending has hit a peak this year, driven by both essential and non-essential spending. With inflation forcing the prices of goods and services higher, it’s perhaps unsurprising to see the amount people are spending is on the rise, particularly when it comes to food and drink, fuel and energy.
“However, giving the rising cost of living, it’s somewhat surprising to see the number of non-essential transactions and the amount spent rise compared to last month. A big part of this is that many households may be looking to enjoy themselves this summer following a difficult couple of years during the pandemic.
“While we expect people to continue balancing their finances in this way, rising inflation and costs may start to impact household finances more acutely in the coming months. This is something we’ll monitor closely.”
