Identify opportunity

The Controlled Consumer:

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Why UK shoppers entered 2026 already spending with intent

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The New Year value hunt started before Christmas.

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Cardlytics’ State of Spend analysis of Q4 2025 and early Q1 2026 shows that UK consumers did not loosen their spending habits over the festive period. Instead, they became more deliberate about how and where they spent. Drawing on card-based transaction data from over 23 million bank accounts, the analysis points to a shift toward a more controlled approach to spending that is now shaping behaviour into 2026.

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The last State of Spend showed that UK consumers had returned to the market, but with conditions. Spending resumed, but cautiously. Shoppers scrutinised price, convenience and perceived quality, pulling back when expectations were not met. Consumers would still spend, but largely when prompted by the right offer or moment.

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The latest data shows that this scrutiny has since become embedded in shoppers’ habits. December revealed how consumers were already operating under tighter decision-making rules as they approached the new year.

With inflation ticking up again at the end of the year, cost pressures remained firmly in place. Rather than retreating from spending altogether, consumers adapted — switching formats, trading down and filtering purchases more aggressively. Festive spending held, but it was more controlled, with loyalty weakening and defaults increasingly questioned. As a result, consumers entered Q1 already spending more selectively.

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Read the full report by downloading it here.

The Golden Quarter is Changing: Inside the 2025 State of Spend

The UK’s peak retail season is evolving. Consumers are still spending, but they’re more selective, strategic, and values-driven than ever before. Based on spend data from over 23 million UK bank accounts and nationally representative research, Cardlytics' State of Spend report uncovers what’s shaping the 2025 Golden Quarter — and where brands should focus to win.

Headline Trend Summaries (With Light Stats)

1. Black Friday is no longer the main event
The era of single-day shopping spikes is fading. Our data reveals that consumers are spreading spend across weekends and early December instead. Brands focused only on the Friday are missing the bigger picture.

2. Gifts that matter and don’t just impress
Over half of consumers say they’re choosing meaningful or practical gifts this year. Beauty and books are holding strong, while luxury and electrical categories are losing ground.

3. Fashion is fragmenting
Fast fashion still performs, but growth is slowing. Shoppers are shifting toward resale platforms and marketplaces that offer affordability and sustainability in one.

4. Grocery is about confidence, not just cost
Spend is still rising across grocery - but discounters, delivery services, and high-end grocers are outpacing traditional supermarkets. Value is no longer just about price; it’s about trust and convenience.

Consumers are still buying. They’re just doing it on their terms. The winners in 2025 will meet them where they are — with relevance, value, and visibility.”

Want the full data?

The full report includes:

• Category-by-category breakdowns from 2022 to 2024
  
• 2025 retail forecasts across 14 key sectors
  
• Consumer behaviour insights and shopping intent
  
• Strategic recommendations for campaign planning

Download the Full Report

UK Loyalty Movement Report: Retail

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‍Introduction‍

In our previous report, Redefining Customer Loyalty, Cardlytics defined loyalty as a consumer’s preference for a merchant over its competitors, analysing spending across six industries to measure customer loyalty and spending patterns with both loyal and non-loyal customers.

But customer behavior isn’t fixed - customers shift between loyalty segments over time. Understanding these shifts helps identify churn and informs strategies to nurture relationships and move customers to higher loyalty segments. In our UK Loyalty Movement Report, we dive into customer behavior in the Retail category to better understand engagement over time by analyzing more than £245 billion in consumer spend behavior.*

Retail Category Loyal Customers

On average, 64% of a merchant’s customers are not actually loyal. But the loyal segment has a much higher share of wallet (79%) than a not loyal segment (21%).

Top Customers (top 20% of most frequent transactors) show a strong uptick as loyal vs not loyal customers. But the loyal customer segment shows more than 3x higher share of wallet.

Findings

We looked into purchase data across Retail in the UK over the last 8 quarters (Q1-23 through Q4-24) on a quarter by quarter basis to see whether even the “most loyal” customers showed changes in their purchase behavior.

Retail Loyalty Movement

Overall, quarter over quarter, 25% of customers tend to remain in their existing segments while 37.2% increase or decrease their loyalty to a merchant. Yet there is much more extensive customer loyalty movement within the “not loyal” segments.

Segment movement

The Tied segment (part of the Not Loyal group) demonstrates the most volatility — with just 7% remaining stable and 29% moving up and 29% moving down into other segments.

Retail Leaky Bucket

Retail brands are acquiring new customers yet even more existing customers are moving into the lapsed tier. This cycle can be reversed by continuing to nurture existing customers.

Diving deeper into the individual segments tells us:

• Loyal customers and those that Prefer the competition are the most stable segments, with 38% and 42% respectively staying in the same category from one
  quarter to the next. This indicates a strong commitment to brand preference — whether for your brand or a competitor's.
• Customers in the Tied segment exhibit the highest level of movement, with just 7% remaining Tied quarter-over-quarter. These shoppers are the most susceptible to influence and represent a key opportunity for brands aiming to tip the scales in their favour.
• Interestingly, Loyal customers still show a 25% lapsed rate, which is comparable to the Tied segment’s 36% lapsed rate. This suggests that attrition among Loyal customers may not be driven by brand disengagement, but rather by natural gaps in purchase cycles — for example, customers who buy apparel less frequently.

Definitions of Customer Segments
Loyal Customers:

• Loyal: Only shop with a specific brand, or have the highest share of wallet with a given brand and relative rank is lower than all other brands in consideration set

Not Loyal Customers:

• Tied: Similar relative ranks to 2 or more brands regardless of share of wallet ranking
• Prefer: Lower share of wallet and higher rank than other brands in their consideration set
• Lapsed: Shopped historically but do not shop currently, as defined by the analysis time period
• New: Shop currently but have not shopped historically, as defined by the analysis time period

Takeaways

Marketers know it’s more costly to acquire or re-acquire customers than to keep existing ones engaged. When brands neglect current customers, they risk losing them and undoing past investment yet the reasons why a customer might “lapse” is different depending upon their loyalty tier. Loyalty is fragile and demands ongoing effort as competition is always close by. To stay top of mind, marketers must continuously nurture relationships, understand customer needs, and offer seamless experiences. To foster loyalty with your customers, consider these recommendations:

• Use an “always on” strategy to keep customers engaged, regardless of purchase
  frequency.
• Regularly update/refine customer segments and adjust reward offers to keep
  them engaged.
• Use targeted campaigns to boost loyalty and revenue.

Cardlytics can deliver a comprehensive Customer Loyalty Analysis with insights into customer behavior and movement across defined loyalty segments. Contact us for more details.

* For this report, we've selected the entire retail category in our data, collectively representing over £245bn in annual card spend. This sample differs from the previous Customer Loyalty Analysis report.