UK consumers are spending again “but with more scrutiny”

The State of Spend: Retail Report from advertising and technology company Cardlytics has revealed that UK shoppers are still spending but are more selective than ever, favouring specialist, value-led, and brand-driven experiences over traditional one-stop shops.

The report, which analysed spending trends based on its purchase intelligence data from more than 24 million UK bank accounts over January, February and March in the last three years, from 2023 to 2025, found that shoppers are returning to the high street, “but only if the price is right”.

In the retail sector, high street fashion and beauty categories are holding firm, buoyed by brand loyalty and a desire for small feel-good purchases, while department stores continue “to lose relevance”.

High street fashion saw a further 5 percent growth in early 2025, after a 9 percent increase in 2024, while make-up and beauty products surged by 19 percent year-on-year in Q1 2024 and reported a modest 5 percent increase in 2025.

Spending in department stores declined 4 percent in 2024, compared with 2023, and a further 5 percent in early 2025, “reflecting the challenges of a one-size-fits-all model in a market where consumers are seeking out more targeted, brand-led propositions”.

Online fast fashion, after flatlining in 2024, showed resilience with a 13 percent uplift in Q1 2025, helped by discount-led promotions and the return of trend-led buying. The report suggests that price and novelty “still hold sway – particularly when brands can meet both at speed”.

Lucy Whittemore, senior vice president of UK partnerships at Cardlytics, said in a statement: “We’re seeing a more discerning consumer – still spending but doing so more selectively and looking for clear value, trusted brands and a sense of reward.

“Physical retail is regaining momentum for brands offering something distinctive, and in a more competitive, cautious environment, loyalty won’t be won by price alone. Targeted offers, personalised rewards and a clear brand proposition will be key.”