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Hospitality stays steady amid record drop in consumer spending

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Hospitality stays steady amid record drop in consumer spending

Hotels, restaurants and bars bucked a downward trend in October, recording a modest rise in spending at a time when there were record falls in other sectors.

That’s according to new figures from Visa UK, which registered an increase of 3.2% in spending at hotels, bars and restaurants.

However, overall spending fell at the quickest rate since September 2013 (down 2% year on year).

Within that, some categories registered much steeper drops. Clothing and footwear was down 9% year on year – a record for that category.

And the high street suffered from the second-steepest drop in spending since April 2012, falling 5% year on year.

Mark Antipof, chief officer – commercial at Visa said: “The pre-Christmas trading season got off to a poor start for retailers with October spending falling at the fastest rate in over four years. The figures are a stark indicator of the strain on household budgets even before the Bank of England’s recent interest rate rise.

“Clothing retailers were the worst hit, suffering from the fastest drop in spending since the Index started in 2009. The unseasonably warm weather didn’t help, but the sector has been struggling to increase sales since the beginning of this year. This is reflected more broadly in the high street performance, with spending falling for the sixth month in a row. In contrast, e-commerce continued its upward growth trend as consumers moved even more of their shopping online.

“We’ve seen another steady month for the hospitality sector. Hotels, restaurants and bars reported a healthy increase in spending, boosted perhaps by families making the most of the half term break, Halloween and early Christmas bookings.

“Retailers will now be pinning their hopes on strong performance around Black Friday and Cyber Monday. November’s data will therefore provide the first real clue on how Christmas is shaping up.”

Annabel Fiddes, principal economist at IHS Markit, the company that helps compile the figures, which are based on spending on Visa cards and in cash said: “The data add to evidence that falling real wages, muted consumer confidence and lingering uncertainties over the direction of the UK economy are having a substantial impact on spending.”

Spending on pubs and restaurants stays strong despite faltering consumer confidence >>

“Self-imposed austerity” causes biggest fall in spending on eating out in a year >>

Foodservice price inflation falls to 6.5% in September >>

 

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