Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

Brits turn to ‘sweet treat economy’ for mood boosts amid economic challenges

by September 3, 2024
September 3, 2024
Brits turn to ‘sweet treat economy’ for mood boosts amid economic challenges

Despite a washout summer, high interest rates, and looming tax hikes, Brits are spending more on small luxuries such as pastries and cosmetics, a trend Barclaycard has dubbed the “sweet treat economy.”

According to Barclaycard, consumer card spending rose by 1% in August following two months of decline, with nearly half of surveyed individuals (47%) continuing to indulge in minor luxuries even while trying to cut back on other expenses.

Karen Johnson, Head of Retail at Barclays, noted a trend of consumers turning to retail therapy for mood-boosting pick-me-ups. Baked goods have become the most popular affordable treat, influenced by social media trends like the viral “Dubai chocolate bar” and the “crookie,” a hybrid croissant and cookie, both of which have seen a surge in sales.

This rise in feel-good spending aligns with what is known as the “lipstick effect,” a theory suggesting that people gravitate towards affordable luxuries during tough times. Originated by Leonard Lauder, the former chairman of Estée Lauder, the theory highlights how lipstick sales rose in the wake of the 9/11 attacks despite overall declines in beauty sales. Barclaycard data showed a significant 7.3% increase in spending at health and beauty retailers in August, marking the largest rise since January 2023.

The trend of spending on small luxuries comes amid pessimistic economic forecasts from Downing Street. Chancellor Rachel Reeves recently highlighted a £22 billion “black hole” in the nation’s finances, and Prime Minister Sir Keir Starmer described the country as “broke and broken.” With warnings of a “painful” upcoming Budget, consumers are seeking comfort in small indulgences.

Yet, despite the bleak outlook, consumer confidence has seen a surprising uptick. Barclaycard’s survey revealed a five percentage point increase in confidence in August, with 70% of respondents feeling more secure in their household finances and 73% more confident in their ability to live within their means compared to the previous month. This boost in optimism may be linked to the Bank of England’s first interest rate cut in four years, with economists predicting further reductions.

Ms Johnson expressed optimism about future spending: “It’s encouraging to see that Brits are feeling noticeably more confident in their personal finances – a strong indicator of future spending as we approach the crucial festive period.”

Retail spending showed growth for the first time since March, with a slight rise of 0.1%. Garden centres benefited from the sunny weather, enjoying an 8% increase in spending, while grocery spending rose by 1.9%, the largest jump since March. However, clothing shops saw a 1.7% decline, likely impacted by bad weather, including Storm Lilian.

Barclaycard also highlighted a growing awareness among consumers of “double-dip” shrinkflation, where products have reduced in size multiple times without a corresponding drop in price—or even with price increases. Products like chocolate, crisps, biscuits, snack bars, and sweets were most commonly reported to have shrunk more than once, a tactic used by companies to maintain profits amidst rising manufacturing and labour costs.

Read more:
Brits turn to ‘sweet treat economy’ for mood boosts amid economic challenges

0
FacebookTwitterGoogle +Pinterest
previous post
Younger Londoners lead the return to the office
next post
HPE vows to pursue £3bn damages claim against Mike Lynch’s estate following tycoon’s death

You may also like

Client courting: 3 tactics for building strong business...

July 7, 2023

UK inflation set to rise after Bank of...

August 12, 2024

Two thirds of UK consumers say personal finance...

March 27, 2023

Why Do Dogs Get the Zoomies: The Science...

March 21, 2023

Getting Too Know You: Michael Baron, Commercial Director,...

July 18, 2024

Software engineer’s row with Rolls-Royce heads to court

September 20, 2022

Gambling rule changes cost Entain £40m in lost...

March 7, 2024

Shein turns its back on New York steaming...

May 12, 2024

UK Amazon warehouse workers are balloted for strike...

September 15, 2022

How to prepare your car for spring driving...

February 27, 2025

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump warns of ‘serious consequences’ if Elon Musk funds Democrats

      June 7, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025
    • House witness flips script on Dem who ambushed him during hearing with unearthed tweet: ‘Iceberg is ahead’

      June 7, 2025
    • Call with China’s Xi, and Trump-Musk exchange fueled barbs during 20th week in office

      June 7, 2025
    • Trump’s conservative allies warn Congress faces critical ‘test’ with $9.4B spending cut proposal

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,568)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved