Rising inflation causes consumer cutbacks in hospitality

The consumer confidence survey conducted by Longitude Research on behalf of Barclaycard for their monthly Consumer Spending Index​, which sees nearly half of the nation’s credit and debit card transactions, showed 29% of the 2,000 respondents spent less in the hospitality sector in October due to rising concerns over household bills and the cost of Christmas.

Bars, pubs, and clubs (37.1%) saw a smaller rise last month than in September (43.5%), and restaurant spending had a larger decline (8.3%) than the previous month (2.1%) while entertainment subscriptions, cinemas, fuel, and the travel industry enjoyed a boost.

Cautious spending in October 

Barclaycard head of consumer products, Jose Carvalho, said: ​“The expensive festive period on the horizon, combined with ongoing concerns around the impact of inflation and supply chain shortages, has meant we’ve seen steady yet cautious spending from consumers in October.”

While overall consumer card spending grew by 14.2% in October, compared to the same period in 2019, 38% of consumers reported finding it harder than normal to buy essential items due to shortages on the shelves, a slight improvement on last month (46%).

Ongoing supply chain shortages continue to weigh on Brits’ minds, with more than a third (34%) being so concerned they are changing their approach to Christmas shopping this year by starting earlier, while cutting back on luxuries and trips to the pub.

This comes as 88% of consumers said they were worried about the impact of rising inflation on household finances, a minor improvement since September (90%), while a similar number (89%) are concerned rising bills will have a negative impact on their household finances, with 38% of these spending less on nice-to-have items.

Encouraging growth in entertainment 

However, there was a 127.1% jump in online takeaway spending, as the colder weather led more Brits to order fast food via delivery apps

Carvalho added: “While the uncertainty around rising household bills appears to be weighing on Brits’ minds, the encouraging growth we’ve seen in entertainment and international travel shows that consumers are still keen to enjoy leisure activities and holidays.

“As the nation continues its Christmas shopping and gears up for Black Friday and other sales, we’re confident that November should bring some welcome cheer to retailers.”