Total card spending in the sector fell by a total of 6.3% with restaurants the worst hit, down 17.5% in January, compared to a 14.1% decline in December. Bars, pubs and clubs (14.9%) saw a smaller month-on-month uplift (up 21.2%).
However, while hospitality and leisure declined overall, spending remained stable among both 16-24 and 25-34-year-olds (up 0.9% and 0.5% respectively), possibly due to younger consumers feeling less concerned about catching Covid-19, and being more comfortable with socialising, says Barclaycard.
The overall data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, shows that consumer card spending slowed to 7.4% growth in January as Plan B restrictions and rising living costs hampered retail, hospitality and travel. Spending on essential items grew 10.4%, impacted by lower growth in fuel spending as Brits worked from home.
Spending on non-essential items saw noticeably smaller growth in January, up 6.1% compared with a rise of 11.5% in December. This is likely due to the combination of Plan B guidance, and the continued rise in the cost of living, says Barclaycard.
This comes as 89% of Brits say they’re concerned about the impact of rising inflation on their household finances, with 30% saying they expect increasing household bills to affect the amount they spend on discretionary purchases.
Despite the ongoing economic headwinds, there is reason for hospitality and leisure businesses to be positive. More than a third of UK adults (39%) say they are planning to eat and drink out more often and 31% feel confident that the vaccine booster rollout will lead them to increase their spending on socialising and shopping in-store.
Valentine’s Day should also give restaurants a further boost, with 28% of Brits planning to celebrate the occasion, with this year’s budget set to increase from an average of £63 during lockdown in 2021, to an average of £77 this year. Of those celebrating, 30% say they will be looking to spend this increased budget eating out at a restaurant.
“January’s Covid restrictions, combined with the rise in the cost of living, clearly impacted consumer spending levels in January. While restaurants and bars, pubs and clubs were inevitably hampered by the ongoing pandemic, there are signs of brighter times ahead for hospitality as Brits say they’re planning to spend more on eating and drinking out to lift their spirits during the winter months,” says Jose Carvalho, head of consumer products at Barclaycard.
“The lifting of Plan B restrictions should also provide a welcome boost to many sectors, as workers travel back into the office and socialise over post-work drinks, while businesses will likely start to see the benefits of increased inbound tourism on retail sales too.”