January storms boosted online and non-essential spending in the UK

Essential spending returned to growth in January after four consecutive months of decline, while wellness and social media trends drove discretionary purchases, according to new data from the Barclays Consumer Spend report.

Despite falling consumer confidence in the UK economy, down five percentage points to 21 percent, spending on essential items returned to growth in January, up 0.1 percent, increasing for the first time since August 2024. It was, however, outpaced by the growth in non-essential spending, which grew 2.7 percent, led by the “resilient performance” of entertainment, health and beauty and digital content and subscriptions.

Barclays data shows spending on clothing and department stores declined by -0.7 percent and -0.2 percent, respectively, after posting growth in December. This comes as almost half (49 percent) of consumers state they are planning to cut back on non-essential spending, with the majority (55 percent) of this group limiting impulse purchases and a similar proportion cutting down on new clothes and accessories (54 percent).

However, pharmacy, health and beauty saw its strongest performance in almost three years, up 10.7 percent, as the New Year and social media encouraged a renewed focus on wellness. This follows data showing one in five consumers (19 percent) said they have recently been influenced by social media content to make a purchase, rising to 40 percent for Gen Z.

The share of online retail spending (excluding groceries) also reached a three-year high, at 58 percent, as 13 percent of consumers said they opted to shop at home due to the wet and cold weather, while 37 percent added that the stormy conditions combined with the dark evenings in January impacted their spending.

Credit and debit card spending grew 1.9 percent year-on-year in January, the highest uplift since March 2024, but remaining lower than the latest CPIH inflation rate of 3.2 percent.

Karen Johnson, head of retail at Barclays, said in a statement: “January’s figures are a positive signal that non-essential spending should remain strong in 2025. Despite expressing economic uncertainty and a cost-cutting mindset, shoppers are continuing to prioritise the things love – entertainment, wellness and evenings with family and friends.

“Social media is increasingly influencing purchasing decisions – whether it’s a trending beauty product or a must-visit holiday destination.”