# Retail spending slows as Budget looms large

By Dan Coatsworth — 2025-10-13

Dan Coatsworth, head of markets at AJ Bell, said: “The lipstick effect is back in fashion as consumers buy small, affordable luxuries to make them feel better during uncertain times.

“We saw this happen during the pandemic where little treats were prioritised over big ticket items at a time when lots of people worried about job security.

“It’s now happening again amid speculation that the Budget in November could include tax hikes and further depress the jobs market.

“In its regular study of consumer spending habits, Barclays said spending on beauty products and clothing was strong in September, whereas spending on flights and hotels dipped, and so did takeaway food.

“Both Barclays and the latest report from the BRC and KPMG pointed to weaker retail activity in September overall. Interestingly, it looks like some people may have tried to get ahead by buying a few Christmas presents early, to stagger the hit to their wallet.

“This situation paints a picture of a more cautious consumer, but not one where the wallet has been sealed shut.

“People are being more considered with their purchases, which suggests many have developed good money management habits.

“However, it presents ongoing challenges for retailers already having to deal with higher employment-related costs thanks to last year’s Budget decisions.”

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