Brits prioritise 'small luxuries amid double-dip shrinkflation' in 2024

Nearly half (46 per cent) of Brits prioritised spending on small, affordable, mood-boosting luxuries such as pastries and cosmetics in 2024 though most shoppers were bothered by "double-dip" shrinkflation majorly seen in snacks and chocolates, states a recent industry report, charting out top 10 trends that shaped consumer behaviour last year.

New data from Barclays reveals that essential spending grew just 0.9 per cent in 2024, down from 3.9 per cent last year, as spending on fuel fell while supermarket growth slowed.

The Barclays Consumer Spend report, which combines hundreds of millions of customer transactions with consumer research to provide an in-depth view of UK spending, reveals the top 10 trends that shaped consumer behaviour this year.

• 'Spendanova' for experience-loving Brits

Brits prioritised spending on memorable experiences in 2024, with the entertainment sector enjoying a 5.8 per cent uplift. Those who spent on entertainment in 2024 each spent £343 on average.

Spending on live shows and concerts increased 6.7 per cent thanks to ticket sales and attendance at major musical events such as The Eras Tour, Sabrina Carpenter, Coldplay World Tour, and Oasis’s reunion.

• Treatonomics and the ‘lipstick effect’

Cutbacks continued for countless consumers, but many adopted a “treat yourself” attitude in 2024. Nearly half (46 per cent) of Brits say they prioritise spending on small, affordable, mood-boosting luxuries such as pastries and cosmetics, even while tightening budgets.

Among this group, baked goods were a particularly popular ‘pick-me-up’, chosen by 43 per cent at an average monthly spend of £22 each, with crookies and pistachio desserts among the year’s top trending treats.

Demand for little luxuries also boosted pharmacy, health and beauty retailers, up 7.1 per cent, further demonstrating the impact of the "lipstick effect", where shoppers prioritise cosmetics purchases, even when limited spending. ‘Beauty spenders’ splashed out £291 each on average in 2024.

• Double-dip shrinkflation

Shrinkflation emerged as one of supermarket shoppers’ top scourges in 2023, while this year saw ‘double-dip’ shrinkflation bite. Two thirds (64 per cent) of cost-conscious Brits noticed ‘double-dip’ shrinkflation in 2024, where products go through two or more rounds of size reductions without a corresponding drop in price.

According to this group, the five most cited products hit by ‘double-dip shrinkflation’ were chocolate (54 per cent), crisps (39 per cent), packs of biscuits (34 per cent), snack bars (32 per cent) and sweets (32 per cent).

• Brits find creative ways to save

Consumer confidence in household finances showed tentative signs of recovery this year, reaching an average of 69 per cent, up from 64 per cent on average in 2023. Brits took control over their finances and embraced new ways to save; almost a quarter (23 per cent) say they have participated in or would consider participating in a “no-spend” challenge, which involves refraining from making non-essential purchases, such as takeaways, coffees and clothes.

Almost half (45 per cent) said they were cooking more at home to save money, while setting clearly defined spending goals (such as saving for a holiday or building an emergency fund) and planning expenses in advance also proved to be popular.

• Television thrives

Demand for digital content soared in 2024, emerging as the year’s strongest performing category, up 13.2 per cent – nearly twice the 7.3 per cent increase seen in 2023.

“Streamflation”, the rising price of streaming subscriptions, also took effect; 59 % of Brits expressed concern about their digital subscriptions becoming more costly. Despite this, only 27% of those cutting down their discretionary spending said that they would reduce their spending on the category.

• Brits continue to pull up a bar stool

Brits continued to flock to bars, pubs and clubs in 2024, as the sector recorded a modest 3.6 per cent year-on-year increase, fuelled by a summer of sport and a desire for festive socialising, with Brits that ventured to the pub spending £344 on average each throughout 2024. Growth at pubs outperformed restaurants in 2024, which were up just 1.7% in comparison, suggesting Brits opted for more casual, relaxed socialising in the last year.

• Grocery Slowdown

Growth in supermarket spending slowed to 1.3 per cent, down from 6.5 per cent in 2023.

In a year of determined budgeting, cost-conscious shoppers continued to look out for loyalty scheme discounts and supermarket deals. Encouragingly, Barclays Consumer Confidence data found over a third (36 per cent) of shoppers have noticed food prices rising at a slower rate in recent months.

• Easing pressure on household finances

There was welcome relief for households as concerns about inflation and the cost of energy bills both began to ease at the midway point of the year.

• Brits take to the skies

Travel sector spending stayed strong in 2024, up 6.9 per cent, but lagged behind 2023, when growth reached 15.2 per cent. Holidaymakers spent £1,117 on average each on travel, and travel agents (7.9 per cent) and airlines (7.5 per cent) both saw significant uplifts in the period.

• Homeowners choose sustainability over style

Spending on home improvements & DIY dropped -7.3 per cent year-on-year, while furniture stores also recorded a -2.2 per cent fall, indicating that Brits have been making fewer home décor purchases, instead favouring experience-led categories.

Whilst energy bills remained below 2023 levels, the energy price cap rise and colder weather kept home heating on the agenda. A quarter of homeowners reported making energy efficiency improvements to their home in 2024. Of those making changes, over half (52 per cent) are seeking to reduce long-term energy use and a fifth hope to increase the value of their property.

Karen Johnson, head of retail at Barclays, said, “2024 demonstrated Brits’ strong appetite for experiences very clearly, spending selectively elsewhere in order to find room in their budgets for the moments and treats that the most matter to them.

“From The Eras Tour to the much-anticipated Oasis reunion; blockbusters at the cinema to quality content on the couch; pastries to lipsticks and planning trips abroad, Brits collectively said ‘yes’ to joy in their spending, even against a backdrop of rising bills and living costs.

“This conscious consumerism will continue to shape spending in the new year, with entertainment likely to maintain its momentum, as Brits continue to embrace their ‘new essentials’.”