UK retail spending increased 2.1% year-on-year in July as consumer confidence in the UK economy reached its highest level in 21 months, according to the latest Barclays Consumer Spend report.
Overall card spending rose 2.0% compared with the same period last year, marking the highest level of growth in 12 months, while confidence in the UK economy climbed six percentage points to 30%, its highest reading since October 2024. Barclays said the combination of England’s Women’s World Cup run, continued warm weather and recovering consumer confidence helped lift both essential and discretionary spending during the month.
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Within retail, spending on clothing rose 2.0%, while general retailers recorded growth of 2.7%, driven by a 4.1% increase at marketplaces. Garden centres also benefited from the hot weather, with spending rising 4.0%, while electronics sales increased 1.3%. However, not all retail categories experienced growth. Department store spending fell 2.3%, furniture stores declined 1.6%, home improvement and DIY spending slipped 0.7% and sports and outdoor retailers recorded a 2.0% decline.
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The report also highlighted growing consumer confidence in discretionary spending, with 53% of consumers saying they felt confident about purchasing non-essential items, up from 51% in June. Confidence in job security also increased to 47%, while confidence in household finances remained stable at 64%.
Outside retail, hospitality and leisure spending rose 2.2%, supported by a 7.4% increase in spending at pubs, bars and clubs and a 2.6% uplift at cinemas. Meanwhile, accommodation spending increased 2.6% and travel agents recorded 2.5% growth, suggesting consumers continued to favour UK staycations, although airline spending fell 6.0%.
The report also found that the use of artificial intelligence for shopping, planning and budgeting continued to rise, with 48% of UK adults having used AI for these purposes, compared with 35% a year earlier.
Rohan Kumar, head of spend insights at Barclays, said: “Card spending strengthened further in July, reaching its highest level for 12 months, with both essential and non-essential spend remaining in growth. Multiple factors played a part, with UK staycations, continued warm weather and England’s World Cup run lifting spending on travel, hospitality, everyday essentials and seasonal retail categories.”
