Propel Morning Briefing

Spend in UK hotels, restaurants and bars rises 3.5%

Spending in UK hotels, restaurants and bars bucked the overall trend by rising 3.5% in August compared with the same month a year ago, according to the latest data from Visa.

The company’s Consumer Spending Index compiled by Markit revealed UK household spending rose for the first time in four months during August, posting a 0.3% year-on-year increase.

Spending rose through five of the eight categories during August, with hotels, restaurants and bars seeing the second-highest growth rate behind miscellaneous goods and services, which includes jewellery, hair and beauty (10.1%).

The recreation and culture category saw the third-highest rise in spend (+2.3%), while food, beverages and tobacco saw a marginal decline (-0.7%), similar to the prior month.

Despite the uptick in August, Visa said the data suggested household expenditure was on track for its weakest calendar year of growth since 2013.

Kevin Jenkins, UK and Ireland managing director at Visa, said: “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 the household squeeze is easing given the clear slowdown in spending during the preceding three months. 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, of Cambridgeshire-based The Illustrious Pub Company, added: “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 those who have come through the door are willing to treat themselves to quality meals rather than looking for a bargain.”

 

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