Baked goods were the most popular form of affordable pick-me-up. Barclays said shoppers may well be influenced by viral snacks on social media, such as the “Dubai chocolate bar”, a chunky chocolate bar filled with pistachios and knafeh – a crispy shredded filo pastry. A video of TikTok influencer Maria Vehera eating one has racked up millions of views.
Another baked good that has gained popularity thanks to the internet is the “crookie”, a hybrid croissant and cookie, which Barclays highlighted as another top seller.
The bump in feel-good spending has coincided with gloomy news coming out of Downing Street. Rachel Reeves, the Chancellor, has accused the Tories of leaving a £22bn “black hole” in the nation’s finances and warned that “difficult decisions” will be necessary to fix the economy. Sir Keir Stamer has described the country as “broke and broken” and last week the Prime Minister warned the upcoming Budget would be “painful”.
Barclays said the increase in spending on treats was an example of the “lipstick effect”, whereby people spend more on affordable luxuries during times of worry. Leonard Lauder, the former chairman of beauty giant Estée Lauder, proposed the theory in the wake of the Sept 11, 2001 terrorist attacks in New York. Sales at his company fell in the wake of the shock, but lipstick was up.
Barclays’ data showed a 7.3pc jump in spending at health and beauty retailers last month, the biggest rise since January 2023.
Ms Johnson said: “This is a much more immediate version of the long-running trend of consumers making room in their budgets for memorable experiences, like tickets for next year’s Oasis tour.”
While the outlook from Whitehall may be pessimistic, consumer confidence among those surveyed by Barclays rose by five percentage points in August.
Seventy percent said they were feeling more confident in their household finances, while 73pc said they were more confident in their ability to live within their means compared with the prior month.
Optimism may have been sparked by the first cut to interest rates in four years, which happened last month. Economists reckon the Bank of England may reduce borrowing costs even further before the year is out.