Restaurant sector bucks the trend in Q2 with a rise in consumer spending

By Stefan Chomka contact

- Last updated on GMT

Spend in restaurants, hotels and bars grows 4.9% in Q2
The UK’s eating out and leisure sectors have shown resilience in the second quarter of 2017, with household spending on hotels, restaurants and bars growing by 4.9%.

This is despite overall consumer spending having fallen by 0.3% in the same period, according to new figures.

Visa’s UK Consumer Spending Index has identified the weakest quarterly growth seen since the third quarter of 2013, with spending on recreation and culture falling for the first time since 2013.

However, spend on food and drink out of the home bucked the overall downward trend, and has continued to grow at 1.9%, according to the data.

The index, compiled by Markit, uses spending on Visa cards as a base and adjusts the figures to take account of all spending, not just that on cards. It identifies the current resilience of the hotel and restaurant sector against a backdrop of annual falling spending in household goods (down 3.4%), on recreation and culture (down 1.2%), and clothing and footwear (down 0.5%).

“The marked deterioration in household expenditure trends since last year comes at a time when households are facing an increasingly challenging scenario of rising living costs and weaker wage growth,” says Annabel Fiddes, an economist at Markit.

“Consumer confidence has also been dampened by uncertainties linked to the outcome of the ongoing Brexit negotiations, the inconclusive General Election result, as well as relatively lacklustre growth across the UK economy.”

Kevin Jenkins, UK and Ireland managing director at Visa, says that inflation is starting to affect shoppers’ habits, with people diverting their spending towards essentials.

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