- Card spending on supermarket shops rose 3.9% in February, Barclays data shows
- This was down from 5.2% in January, helped by lower food inflation
- But majority of customers say they are still seeing ‘shrinkflation’ on food items
Rises in the cost of a supermarket shop appear to finally be slowing down as food price inflation eases off, according to new data from Barclays.
Card spending in supermarkets grew by 3.9 per cent in the year to the end of February, according to the bank, compared to an increase of 5.2 per cent in January.
This was helped by the fact that food price inflation slowed to 7 per cent in February, reaching its lowest level since April 2022.
Overall card spending edged up by 1.9 per cent across the year according to Barclays, the smallest annual increase since September 2022 when spending rose by 1.8 per cent. The figure is also well below the latest CPI inflation rate of 4.2 per cent.
Shoppers swapped going out for staying in February as spending on takeaway services and digital subscriptions rose
The bank said two-thirds of shoppers reported that they were trying to cut costs in their weekly shop, while a quarter were turning to simple ingredients like pasta, rice and vegetables to cook cheaper meals.
However, while prices at the checkout appear to be falling, so too are the sizes of products. Of the 2,000 shoppers surveyed by Barclays, 78 per cent said they were concerned about ‘shrinkflation’.
This is when the size of a food item is reduced, but the price stays the same or rises.
In addition, 63 per cent said they wanted Government action to tackle product shrinkages, such as forcing manufacturers to display the reduction in content on packaging.
More than half of shoppers, meanwhile, have felt the bite of supply chain issues, reporting that they have noticed supermarkets running out of stock during February.
Almost a third said they were worried about shortages of tea, after reports that some stores are struggling to stock the product due to Houthi strikes on vessels in the Red Sea.
Karen Johnson, Barclays’ head of retail, said: ‘At the supermarket, the majority of shoppers have noticed the impact of supply issues on stock, with tea shortages causing the most concern.’
Another trend that irked consumers in February was ‘drip pricing’ according to the research. This is when retailers impose added charges at checkout when shopping online.
The practice was reported by 39 per cent of shoppers when ordering food online, as well as 32 per cent when purchasing airline tickets and paying for live events.
Staying in is the new going out
Sneaky charges didn’t stop consumers from splashing on takeaway services during February though, with spending rising by 5 per cent year-on-year as more people chose to enjoy nights in.
Events such as the Super Bowl and Baftas and the success of TV shows like Netflix’s ‘One Day’ boosted digital subscriptions by 11.8 per cent.
Unsurprisingly, as more shoppers decided to stay indoors, last month proved miserable for the hospitality sector.
Restaurants saw card spending decline by 13.4 per cent, compared with 11.6 per cent in January, while spending in bars, pubs and clubs was the lowest since September 2022.
Poor weather in February may have also dampened spirits, Barclays said, as non-essential spending fell 1.7 per cent, and in-person retail sales and clothing spending were down 2.2 per cent and 1.0 per cent each.
Online shopping grew, on the other hand, with the rainy month providing a 1.2 per cent spending boost.
Johnson said: ‘February’s wet weather meant Britons chose to spend more time indoors, resulting in a slowdown in high-street and hospitality spending. This shift in behaviour meant [in-home experiences] enjoyed a boost, as consumers opted to enjoy cosy nights in with a TV show and a takeaway.
‘With Britons having reined in discretionary spending during the winter months, and as inflationary pressures begin to ease, retailers will be hopeful that the onset of warmer weather lifts spending – particularly if consumer confidence improves in the summer.’
Cinema spending exploded 146 per cent on the release day of Oppenheimer and Barbie in September last year, according to data from Lloyd’s Bank.
Movie fans flocked to cinemas for the entire week following the releases, with card spending in cinemas rising by a minimum of 136 per cent, and peaking at 171 per cent four days after the release.
Fans shelled out on watching both films on the same day
Cinema-goers also spent 60 per cent more after the release of the Super Mario bros movie, 29 per cent for Spider-Man: Across the Spider-Verse and 21 per cent for Killers of the Flower Moon.
The bank’s data also showed that ‘Swifties’ came out in full force for the release of Taylor Swift’s The Eras Tour in cinemas, with spending rising 48 per cent on September 26, when fans could pre-book tickets for up to £24 each.
‘When it comes to the spending awards, Barbie and Oppenheimer steal the show, with our data showing cinema spend sky-rocketed the day “Barbenheimer” hit cinemas,’ Gabby Collins, Lloyds’ payments director said.
‘But it’s not just critically-acclaimed films that saw people swap the small screen for the big screen – family-friendly titles like Super Mario and Spider-Man also led to big spending uplifts as people enjoyed some escapism.’
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