Consumer spending on hotels, restaurants and bars rose sharply in February, despite signs that shoppers are growing more cautious in the face of economic uncertainty.
Barclaycard's latest monthly consumer spending figures reveals a slow-down in the growth of overall consumer spending to 3.3%, the second consecutive monthly slowdown since year-on-year growth reached a peak of 4% in December 2015.
However, the hospitality sector is bucking this trend as consumers increasingly choose to spend their money on experiences rather than goods. The Barclaycard data shows that, in particular, Valentine's Day and the half-term holiday boosted spending on experiences, with restaurants, pubs and hotels up 13.8%, 12.8% and 7.5% respectively, compared to February 2014.
Barclaycard research shows consumer confidence has fallen to its lowest level since Q3 2014, with confidence dropping sharply over the last three months due to stock market turmoil, uncertainty around Britain's EU membership and lower domestic growth forecasts.
Barclaycard said consumers are cutting back on spending on items such as clothes and electronics in order to afford experiences such as dining out.
Barclaycards public relations manager Linda Yang told The Caterer: "We are seeing people really budgeting so they can afford these experiences. We have seen restaurant, pub and hotel spending going up and up over the past year. There is a fundamental shift in consumer spending with people preferring to spend what they have on experiences rather than items such as clothes."
However despite the growth of experiential spending, consumers are spending cautiously, Yang added. "The average transactional value of this experiential spending is going down, even though the volume is going up, so consumers are tending to go out more often but spend less."
Paul Lockstone, managing director at Barclaycard, also sounded a note of caution. He said: "After a strong run in the second half of 2015 it seems that consumer confidence has finally caught up with the wider economic news.
"Ongoing worries over the economy and uncertainty around the UK's EU membership may cause shoppers to continue to take a more cautious approach to spending over the coming months."
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