Restaurants and pubs sidestep sharp spending slowdown

Restaurants and pubs have avoided a sharp slowdown in consumer spending, which has dropped to its lowest level in two years according to new figures.

Berclaycard, which processes nearly half of all credit and debit card transactions in the UK, said that consumer spending growth slowed to just 1.6% in March, as consumers reined in purchases in nearly all categories.

The business blamed a wet and windy start to the month for discouraging shoppers from updating their wardrobes for spring, as well as putting a brake on spending in garden centres and on travel.

Despite that, spending growth in both pubs and restaurants was up 11.9%, boosted by Easter and Mother's Day.

The only other sector to perform better was cinema spend which climbed by 12.8%, helped by the release of Batman v. Superman and the continuing popularity of Zoolander No. 2 and Deadpool.

Meanwhile, Barclaycard found that only one in three (34%) Brits feel upbeat about the UK economy, fewer than at any time since Barclaycard began collecting this data in Q3 2014.

Subdued wage growth is also having an impact on consumers' outlook. Average real earnings are about 6% below their 2008 level and just one in four (26%) is confident that their personal spending power will rise during the rest of the year.

Paul Lockstone, managing director at Barclaycard said: "Since the turn of the year we have seen a steady fall in the rate of spending growth, but the continuing impact of global economic headwinds and an uncertain outlook really caught up with consumer spending in March. Spend on non-essential items grew at the slowest rate since 2014, while the emerging trend for compartmentalisation in the weekly shop, with people willing to mix and match between discount stores and more established high-street retailers, suggests shoppers continue to place a premium on value for money.

"Some sectors did show encouraging signs, however - notably entertainment and leisure - as consumers continued to spend on experiences, often with loved ones or their families. Looking ahead, it'll be interesting to see whether shoppers continue this trend, particularly if confidence in the economy continues to wane."

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