People splitting restaurant bills with cards saw restaurant spending drop by nearly 11% in September compared to the previous month.
Cash-strapped Britons are curbing dining out and cutting back on takeout purchases to accumulate funds for the forthcoming expensive Christmas splurge. In September, restaurant spending witnessed a substantial decline, plummeting by 10.8% month-on-month. This slowdown is in stark contrast to the 5.8% decrease recorded in August, as indicated by the most recent UK consumer card expenditure data from Barclays.
Furthermore, the growth in spending on takeaways has also notably decelerated, dropping from 9.2% in August to 6.5% last month. This shift comes as 44% of surveyed Britons expressed their intention to reduce discretionary spending in order to allocate funds for Christmas expenses.
The primary focus of cost-cutting measures has centered around dining out at restaurants, with 60% of surveyed individuals identifying it as the most common approach to bolstering their household budgets in preparation for the festive season.
This shift towards saving has also been reflected in monthly foot traffic data, which revealed a nearly 3% decline in visits to high streets, retail parks, and shopping centers last month, according to the British Retail Consortium.
Shopping centers and retail parks experienced the most significant drops in foot traffic, declining by 4% and 2.4%, respectively, compared to August.
Andy Sumpter, a retail consultant at Sensormatic Solutions, noted, “Instead of the usual increase in shopper traffic we typically see in September due to back-to-school shopping, footfall remained subdued as consumers continued to exercise caution with discretionary spending, possibly in anticipation of saving for the lucrative holiday shopping season and Christmas.”
Two-fifths of consumers anticipate higher expenses during Christmas this year, with a fifth already commencing their gift purchases to manage costs. Nearly one in five (18%) have initiated discussions with loved ones about reducing gift-giving for the upcoming holiday season.
Despite the slowdown in certain areas, overall consumer card spending saw a 4.2% increase in September. However, this growth was overshadowed by the 6.3% inflation rate, driven by rising product costs.
Spending on essential items saw a significant rise, jumping from a 1% increase in August to 4.6% last month, with an 11% surge in fuel expenditures.
Although food prices experienced a decline for the first time in two years during September, the expenditure on groceries continued to rise, marking a 7% increase compared to the 4.5% growth observed in August.
Esme Harwood, a director at Barclays, noted, “Grocery spending eased off during the summer, thanks to the long-awaited reduction in food price inflation. Concerningly, the growth picked up again in September, potentially signaling that food prices may not decrease as rapidly as anticipated.”
A significant majority of consumers, three-quarters to be exact, are familiar with the concept of shrinkflation, in which supermarkets maintain or increase prices on products while reducing their size or weight. Furthermore, 68% of respondents expressed the belief that retailers should label such products accordingly.
Pubs and bars experienced a boost in patronage with the commencement of the Rugby World Cup, which has now reached the quarter-final stage, featuring teams like England, Ireland, and Wales. In the preceding August, prior to the tournament’s commencement, spending in these establishments had risen by 2.8%. However, during the last month, spending surged by 6.1%, providing a welcome boost for these venues.
