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Restaurants maintain double-digit growth amid spending slowdown

10 May 2016 by
Restaurants maintain double-digit growth amid spending slowdown

Restaurants maintained double-digit growth in April, despite consumer spending suffering a second successive weak month of growth, rising just 1.9% year-on-year.

Barclaycard, which processes nearly half of all credit and debit card transactions in the UK, said April's growth was a slight uptick on March's 1.6%, but the figures remained below the rolling 12-month average of 3.7%.

It said consumer confidence continued to be low, sparking the weaker performance seen from the start of the year, after growth fell from 4% in December 2015.

Factors such as slowing wage growth, flat-lining employment rates and uncertainty about the EU referendum were cited as issues impacting on consumer confidence.

Barclaycard's latest monthly consumer spending figures showed consumer confidence in their household finances at 57%, down from an average of 71% in 2015.

Growth for restaurants was up 11.3% compared with the same period last year, as consumers prioritised leisure time with family and friends.

While overall travel spend was up 5.9%, boosted by a 6.5% increase in air travel as people looked ahead to their summer holiday.

But shoppers were shown to have cut back spending on essentials, which impacted on supermarkets the most. The category shrunk by 6.1% - the worst performance since Barclaycard records began in 2011.

Paul Lockstone, managing director at Barclaycard said: "April proved another challenging month for retail as consumers held back in the face of economic headwinds. The feel-good factor they enjoyed in 2015, encouraged by rising employment and increasing household incomes, has been hit by a combination of uncertainty on everything from oil prices to the EU referendum.

"Spending on leisure, travel and entertainment proved to be more robust as consumers protected spending on experiences by cutting back on essentials, which is a pattern we've seen for a few months now. However with this producing diminishing returns, the wider economic picture will need to improve if we are to see consumers return to the level of spending growth we saw last year."

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