Consumers start to spend again, but largely on leisure and travel rather than in stores

By SIMON WATKINS FOR THE MAIL ON SUNDAY

Updated: 05:12 EST, 11 March 2013

Consumer spending jumped by 4.2 per cent last month, the fastest rate in more than a year, according to figures from Barclaycard provided exclusively to Financial Mail.

The rise in comparison with the same month in 2012 was greater than the rate of inflation at 2.7 per cent, indicating real growth in consumer spending, with airlines and restaurants among the biggest beneficiaries.

But the figures showed that some stores were still suffering severely.

Leisure: People spent more on holidays and eating out, with spending on airlines up 14 per cent on last year, and up 11 per cent in restaurants

Spending on men’s clothing was down 5.8 per cent and women’s clothing down 1.9 per cent, while spending in department stores dropped 2.2 per cent.

As well as issuing its own cards, Barclaycard’s merchant services operation provides card-processing systems to a huge range of retailers.

This means its statistics are based on about half of all spending in Britain on either credit or debit cards.

Commenting on the rise in total spending, David Chan, chief executive of Barclaycard consumer financial, said: ‘It’s encouraging to see a return to real spending growth with February seeing the highest increase in spending levels seen in the past 12 months.’

Leisure and travel were the big gainers; spending with airlines was up 14 per cent compared with February 2012, in restaurants it was up 11.3 per cent and in cinemas it was up 4.6 per cent.

However, the figures also showed that traditional high street stores, which have been hit by a wave of high-profile collapses, lost out to online shopping.

Spending at bricks-and-mortar stores rose by just two per cent last month.

While this was far better than the drop of 1.9 per cent seen in January, it still lagged behind inflation, meaning that spending fell in real terms.

Shoppers: Fewer hitting the stores, more logging onto websites

It also lagged far behind the massive 13 per cent year-on-year rise in online spending.

At florists, online spending rose  40 per cent in February compared with a year ago while online spending at department stores jumped  36 per cent. Clothing saw sharp falls in spending overall but was up  12.8 per cent online.

John Lewis Partnership reported strong results last week, being one of the few high street retailers to show unqualified growth.

Its chairman, Charlie Mayfield, described the boom in online sales through its websites as ‘a quiet revolution’. Its online turnover neared £1 billion last year, more than ten per cent of its total sales.

The broad rise in consumer spending shown by the Barclaycard figures appear to echo figures from the British Retail Consortium, which last week reported a 4.4 per cent rise in shop sales in February, the biggest rise in two years.

The BRC’s Retail Sales monitor uses data provided by 70 retailers.