Retail and leisure spending boosted by beauty, furniture, and streaming hits in August

Overall retail spending increased by 0.6% in August 2025 when compared to this time last year. The growth this month was predominantly driven by Pharmacy, Health & Beauty retailers, with spend rising by 15.6%, marking 53 months of consecutive growth for the category. Furniture Stores also had a strong month with spend rising by 11.6%, the highest uplift in year-on-year growth seen in this category since March 2022 (11.8%).

Meanwhile, Clothing stores enjoyed a 2.5% boost. This comes as 41% of consumers say they treat themselves regularly, but are finding ways to do so on a budget, while three in five (61%) have bought themselves a ‘pay day’ treat as a pick-me-up in the last year.

Spend for the overall Hospitality & Leisure sector also increased in August 2025, up 2.5% and in line with the growth seen in July 2025 (2.7%). The strongest performing subcategory was Digital Content & Subscriptions, which increased by 5.6% amid the success of animated film ‘KPop Demon Hunters’. Travel spend also increased in the month, at 3.1%, although this is lower compared to the year-on-year growth seen in August 2024 (6.8%) with consumers opting for off-peak holidays in 2025 to save money.

Hospitality and Leisure

Digital Content & Subscriptions was the strongest performing Hospitality & Leisure category in August 2025, increasing by 5.6% compared to this time last year. The growth this month comes amid the wide success of animated film, ‘KPop Demon Hunters’. Other streaming hits in the month included ‘The Summer I Turned Pretty’ and ‘Wednesday’.

Meanwhile, spend on Takeaways and Fast Food increased by 1.2%, an uplift compared to July 2025 (0.1%). This comes as takeaways were cited as the most common ‘payday treat’, where consumers wait for payday to purchase an discretionary item or experience as a means of money management.

Three in five (61%) consumers have bought a payday treat in the last 12 months, rising to 81% for Gen Z. After takeaways (23%), clothes or accessories (20%) top the list of payday purchases, followed by sweet treats (20%) and meals out with family and friends (19%).

Rich Robinson, Head of Hospitality and Leisure, Barclays Corporate Banking, said: "Digital Content & Subscriptions had a strong performance in August, amid the success of animated film ‘KPop Demon Hunters’. Travel also saw an uplift, though at a slower pace, as consumers opted for off-peak getaways and used AI tools to plan more efficiently."

Consumers reduce holiday costs through off-peak travel and AI itineraries

Travel, which emerged as one of the strongest performing categories post-COVID, grew 3.1%in August 2025, although this is lower than the year-on-year growth seen in August 2024 (6.8%). This comes as 54% of consumers say they are opting for off-peak holidays in 2025, rising to 71% for Gen Z. Of those travelling off-peak, 32% are doing so to save money.

Consumers are also making use of AI tools to help cut costs. Of the one in three (34%) using AI tools such as Chat GPT for planning, spending and budgeting, 27% are doing so to plan holidays. Among this group, the top uses are creating itineraries (35%), researching and choosing destinations (32%) and translation (30%), while 27% are finding and comparing prices, discounts and deals with these tools.

Consumer confidence rises post-base rate cut

Confidence in the strength of the UK economy improved six percentage points month-on-month in August 2025, rising to 28%, while confidence in the European and global economy both hit 10-month highs, at 31% and 28% respectively.

Confidence in household finances, at 73%, was up both month-on-month, and year-on-year, from 72% and 70% respectively. One in five consumers (18%) said the base rate reduction eased their personal finance concerns, while fewer consumers said they were concerned about rising interest rates in August, down one percentage point to 62%.