Consumer spending set for weakest year since 2013
The index revealed that overall consumer spending rose for first time since April (up 0.3%) year on year.
Spending within the hotel, pub and bar sector increased by 3.5% in August compared to the same time last year.
The index showed that although consumer growth was only marginal, this contrasted with reduced spending in the prior three months. Despite the uptick in August, the data suggested that household expenditure is on track for its weakest calendar year of growth since 2013.
“Consumer spending in August has bucked the trend of the previous three months, registering a marginal increase against the same period last year. Nevertheless we are wary about taking this as a sign that the household squeeze is easing given the clear slowdown in spending during the preceding three months,” said Kevin Jenkins, UK & Ireland managing director at Visa.
“If we look at different sectors, spending on clothing was down in August, albeit at a slower rate than in July, despite a much hoped-for back-to-school boost.
“Spend on transport and communications fell for the eighth consecutive month as consumers continued to shy away from big-ticket items such as car purchases and air travel.
“On the other hand, the experience economy saw some success last month, possibly as a result of a rise in staycations due to the weakness of sterling. This translated into a four-month high in recreation spending and sustained growth in the hospitality sector.”
Josh Beer from The Illustrious Pub Company, Cambridgeshire, said: “We had a small dip in revenue in August. The summer holidays wouldn’t be the busiest time for us.
“And, as we are changing our business model to focus on higher quality and slightly more niche dining, we expected an initial dip in the number of customers anyway
“One upside to the change is that those who have come through the door are willing to treat themselves to quality meals rather than looking for a bargain.”
