Non-essential consumer spending saw muted growth in December of just 2% but this was boosted by strong growth in pubs and restaurants.
That is according to data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions.
Pubs saw an increase of 12.9% while restaurants were at 9.1% as consumers made the most of the festive period by relaxing and dining out.
Essential spending growth dipped to just 0.6% – the lowest figure recorded since July 2016. Overall, consumer spending grew just 1.8% year-on-year in December, the lowest rate of growth seen since March 2016, equating to a decline in real terms when adjusting for inflation.
In the face of the challenges facing the high street, more than half of Brits (52%) say they want to support their high street. Furthermore, 38% said they are deliberately choosing the high street over online-only retailers.
But despite Brits’ good intentions, many remain concerned about their spending power. One in two consumers (49%) expect to cut back in January to cover the cost of Christmas, while 48% say they feel less confident about their personal finances in the coming year than they have done for many years.
Esme Harwood, director at Barclaycard, said: “Growth in consumer spending dropped to its lowest level since 2016 and represents a decline in real terms. Many Brits were more modest in their approach to Christmas spending compared to 2017, cutting back on the essentials to balance the costs of the festive season. Despite a desire to support their local high street, Brits expect to cut back in January and remain cautious amidst ongoing economic uncertainty.”