Barclaycard sees positives despite August travel slump

Sales from agents, airlines and other travel sectors fell 61% compared to August 2019. Barclaycard blamed travel restrictions and quarantine guidelines for continuing to impact the sector.

However, one hopeful sign for the leisure sector generally was that hotels, resorts and accommodation saw their smallest decline since lockdown began, at -19.1% year-on-year; an improvement on July which was down 29.9% as potential clients instead booked staycations during the school summer holidays.

Another positive was that consumer spending overall grew 0.2% year on year in August, the first uplift since February 2020.

Spending on non-essential items contracted by 1.6%, the smallest decline since the onset of lockdown. Barclaycard said this was a sign consumers had become more comfortable visiting shops.

There are also clear indications 2021 holiday sales will benefit from pent-up demand.

Barclaycard said: “While the nation’s confidence in the UK economy has fallen to its lowest (19%) since Barclaycard started the index six years ago (compared to 42% in January and February 2020), confidence in household finances remains steady at 68%.

“This can perhaps be attributed to the fact that 45% have saved money because they were unable to go abroad this summer, with nearly a quarter (23%) putting the money into savings instead.”

Raheel Ahmed, Barclaycard’s head of consumer products, said: “It’s encouraging to see the first uplift in spending after such a turbulent time for retailers. It seems the final throes of summer have spurred households to get out and about with clothing stores, pubs and bars welcoming growth for the first time since lockdown began.”

However, he warned: “Months of lockdown has helped accelerate the trend towards digital…meaning the road to recovery may still be a long one for bricks-and-mortar stores.”