Barclaycard says spending upturn continued in August

Various retail monitors from across the industry have pointed towards positive sales patterns of late, and research released by Barclaycard this weekend has added to the growing feeling that consumer spending confidence is strengthening.

In-store spend via Barclaycard, which processes nearly half of all credit and debit card transactions in the UK, was up 3.3% year on year in August, while online spending jumped up by 9.9%.

The card provider attributed the UK's "best summer since 2006" for a reported leisure and entertainment spending splurge, which saw restaurant spend up 13.3%, cinema and theatre spend rise 8.1% and hotel spend increase 6.7% - all compared to the same month in 2012.

Overall spending on Barclaycard grew 4.4%, representing the fourth month in a row that growth has been above 4% and the fifth straight month for positive real-spend growth.

British Retail Consortium figures released last week indicated that total sales in August were up 3.9% in August, with like-for-like trading also up by a healthy 2.2%. It has prompted industry experts to talk of "sustained recovery".

Neil Saunders, managing director of retail research agency Conlumino, whose full comments can be read here, remarked: "Retail continued its good run in August with yet another solid set of numbers, albeit ones that were slightly down on the previous month when total sales grew by 3.9% and LFLs increased by 2.2%.

"While the slip in growth is relatively modest, it also needs to be set against a very weak comparative from August 2012. Taken in combination, these things suggest that the heady growth rates seen during July were something of a temporary boost, largely aided by the better weather. As such, we maintain our view that it is likely the growth rate will moderate still further as we move through the rest of 2013.

"All that said, it is clear that there is a good level of underlying momentum in the retail sector and that it is now in a period of sustained recovery which is likely to continue up until Christmas and perhaps beyond."

That said, Barclaycard recorded a 0.6% drop in spending on clothing and a 1.4% spending decline on electricals in August, while grocery sales were said to be flat.

Such contrasting data serves as a warning for retailers not to get carried away with what is looking like being a good summer, although there have certainly been more positive comments made about the industry in recent weeks.

Adding his voice to this growing list of retail optimists, Barclaycard CEO Val Soranno Keating said: "It was confirmed last week that we've enjoyed one of the warmest summers on record and the consumer response has been to hit the high street, with in-store spend growing in August by a robust 3.3% versus last year – the 2nd highest level this year.

"Spending on eating out, holidaying in the UK, and doing up the house grew particularly strongly in August. When set alongside the other economic news we've seen recently, and with forecasters predicting an above average September weather-wise, we expect this month to be another positive one and for UK PLC to end the third quarter on a high."

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