UK pubs and restaurants bucked the trend as consumer spending remained subdued during August, according to new data from Barclaycard.
Restaurants saw a 10.9% uplift while pubs saw growth of 8.6% against last year. Non-essential spending was up 1.4% year-on-year as overall consumer spending grew 1.3% – representing a decline in real terms when accounting for inflation – following similarly muted figures in May, June and July. Essential spending saw muted growth of 0.6%, with petrol contracting 1.9%. Travel saw modest growth of 0.6%, with travel agents up 1.0%, whereas airlines and hotels contracted by 0.4% and 0.2% respectively.
Economic uncertainty continues and the effect of the weak pound weighed heavily on consumers’ minds in August. Only 31% of UK adults suggested they are confident in the UK economy while more than half (52%) are worried about the impact of rising prices over the next month. Barclaycard said this was reflected by a fall in consumer confidence, with just 29% of UK adults feeling positive about the state of the UK economy. In addition, a quarter (23%) said they are uncertain about their job security – the highest this figure has been in more than two years. This has led to 54% of Brits now being confident in their ability to spend on non-essential items – a 6% drop from last month.
Barclaycard director Esme Harwood said: “August’s figures signal the end of a fairly subdued summer for consumer spending – showing a marked contrast to the previous August. A weak pound and worries about rising prices are causing concern for many, with Brits looking to better balance their household budgets. That said, spending at pubs and restaurants remains robust, suggesting Brits have been making the most of the longer days by relaxing and dining out.”
Source: Propel Newsletter