Hotels and restaurants continued to enjoy strong increases in consumer spending in May, despite an overall fall in consumer spending growth to 10-month low.
That's according to the latest figures from Barclaycard, which found that entertainment spending remained resilient during the month, with restaurant spending up 11.7% and spending on hotels up 11.4% as consumers planned their summer break.
The overall drop in consumer spending growth to 2.8% year-on-year in May represented a 10-month low. Shoppers rowed back on spending across a number of categories, forgoing material goods in favour of experiences.
Consumers' confidence in their ability to spend on non-essentials also dipped a further two percentage points in May to 41%, with a slim majority (52%) of Brits saying they are 'feeling the squeeze' due to a combination of inflation and subdued wage growth.
Of these, 69% said the sentiment is because their weekly shop is more expensive than it used to be, and another three in 10 (31%) say it is because of increased fuel prices - highlighting the impact of rising prices on groceries and essentials more broadly.
But some Brits will spend as usual this summer, with a fifth (20%) planning to increase spending on entertainment next month. A similar proportion (22%) will be splashing out on holidays.
Paul Lockstone, managing director at Barclaycard, said: "Consumer spending growth was subdued last month as shoppers paused for breath after an Easter bounce in April. With CPI running at its highest rate since 2013, it's no surprise that more of us are starting to 'feel the squeeze' of inflation and slower wage growth, perhaps prompting small changes to our spending patterns.
"It's far too early, however, to suggest that this is the beginning of a period of increased caution. In May we witnessed the resilience of the 'experience economy' and all signs indicate spending on leisure time will continue to be a priority. As we head into summer, it will be interesting to see how the spending picture might change after consumers reassess their household budgets."
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