Restaurant spending down in August, Barclays finds

Restaurant spending dropped by 5.8% in August after dropping 2.7% in July, according to new data from Barclays.

According to the data, 61% of people surveyed stated that they had deprioritised eating at restaurants.

Alongside this 58% of people stated that they were deprioritising spending on takeaways.

Despite this spending on takeaways and fast food increased modestly by 6.4% compared with a 9.2% increase in July.

More generally, consumer card spending grew 2.8% year-on-year in August, noticeably lower than the latest CPIH inflation rate of 6.4% and July’s growth figure of 4%.

Abbas Khan, UK economist at Barclays, said: “Muted spending growth in August is in line with other data sources, such as soft PMIs and stalling consumer confidence, suggesting that the bite from monetary tightening is starting to be felt more acutely.

“However, with further moderation in inflation and strong wage growth set to support real household disposable incomes, we continue to think the economy will avoid a recession in the coming quarters, even if growth is only set to be sluggish.”

Esme Harwood, director at Barclays, added: “The rainy weather impacted high street and hospitality venues in August, but Brits were still keen to spend on memorable summer experiences. The huge Box Office success of ‘Barbie’ and ‘Oppenheimer’ meant entertainment enjoyed another strong month, while holidays abroad boosted international travel and pharmacy, health & beauty stores.

“Shrinkflation, and now “skimpflation”, are increasing concerns for value-seeking shoppers. However, Brits’ confidence in their household finances is unwavering, suggesting they remain resilient in the face of these inflationary pressures.”