Propel Morning Briefing

Eating out remains at heart of UK spending even as financial pressures grow

Eating out has remained at the heart of UK spending in the second quarter of the year even as financial pressures grow, according to the latest Cardlytics Spending Index.

Figures from the report, which is based on the spending behaviour of more than three million bank customers, showed overall spending was up 3% year-on-year but down from the 9% growth seen in 2016.

Restaurants (up 9% year-on-year) and quick-serve restaurants (up 19% year-on-year) continued to be the main drivers of spending with eating out now representing almost one-tenth (9%) of consumers’ wallet share.

This is a leap of two percentage points since the beginning of 2015, when Cardlytics started tracking spending. The findings are in line with recent data revealing the contribution of the hospitality industry to the British economy has outpaced growth in every other sector since the 2008 downturn.

There is a wider trend of consumers wanting to treat themselves during the leaner times. In addition to increases in restaurant spending, airline and hotel spend is up year-on-year (12% and 9% respectively).

The leisure industry experienced a 6% increase in spending in the second quarter compared with the previous year, and a 9.5% spike since the last quarter.

Additionally, the grocery sector has gained some momentum, with spending up 3% in the second quarter compared with this time last year, and 6% up on the last quarter as the combination of hot weather and food inflation lifted supermarket sales.

Pete Gleason, president of international operations at Cardlytics, said: “This data shows just how much the UK loves eating out. Even amid a squeeze on household finances, spending in restaurants and cafes continues to go from strength to strength. The increased demand is good for hospitality but with the sector set for further growth in the form of increased competition, brands will have to work even harder to stand out and attract new customers. But elsewhere, with consumers cutting back on spending, it’s clear brands will have to adjust to a new normal of low spending growth and focus on offering value.”

 

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