Consumer spending and consumer behaviours are impacting boardroom decisions and changing business models daily, and trying to predict the future and act accordingly is getting increasingly more difficult.
It is common knowledge that the increased cost of living continues to impact heavily on consumer spending but it was good to see a slight reprieve over the Platinum Jubilee celebration period especially within entertainment, travel and hospitality.
According to an interesting data report from Barclaycard Payments which processes nearly £1 in every £3 spent on credit and debit cards in the UK, it shows that during the Platinum Jubilee long weekend (2-5 June) transaction volumes soared across a number of sectors.
• The UK sectors seeing a strong uplift in spending include:
– Up 41.5 per cent, compared to the same period (3-6 June) last year*
o Pubs, Bars and Night Clubs:
– Up 74.2 per cent, compared to the same period last year*
– Up 67.3 per cent, compared to the same period last year*
o Public transport services:
– Up 38.8 per cent, compared to the same period last year*identifies spending boom across Hospitality, Transport and Entertainment as Brits celebrate Platinum Jubilee.
As positive as the above is, it has little impact on everyday consumer spending, as Brits cut back on subscriptions and dining out.
According to research carried out by Barclaycard,
- The cost-of-living squeeze is also leading Brits to rein in their spending on eating and drinking out, with restaurants (-5.9 per cent) and bars, pubs and clubs (-1.2 per cent) seeing slight declines when comparing spending in May 2022 with April 2022.
- There was also a significant rise (83.3 per cent) in public transport spending, reflecting the fact that more Brits are now commuting to offices compared to the same period last year, when working-from-home guidance was still in place.
- Digital content and subscriptions declined -5.7 per cent, as one in five say they are reviewing their subscriptions and cancelling any they can live without
- Average spending on utilities per customer grew 34.5 per cent, with four in 10 looking for ways to save energy and water at home
- Shopping at supermarkets and specialist food and drink stores saw slight declines (-2.0 per cent and -0.9 per cent respectively) compared to May 2021, (41 per cent) of consumers now say they are looking for ways to reduce the cost of their weekly shop, to adjust for rising living costs.
- It was a particularly strong month for the travel industry, which outpaced inflation and saw triple-digit growth (189.7 per cent) compared to last year, when there were many more international restrictions in place. Encouragingly, the sector also grew month-on-month.
- Travel agents seeing a sizeable uplift of 24.2 per cent and airlines growing 6.6 per cent, as more holidaymakers booked their summer trips abroad. Hotels, resorts and accommodation also grew (1.2 per cent) month-on-month, suggesting a parallel rise in staycation booking in May.
- Spending on non-essential items grew 11.6 per cent year-on-year, largely driven by hospitality and leisure spending, which increased significantly (67.2 per cent) compared to the same period last year, when the rule of six was still in place and indoor venues were only open for half of the month.
José Carvalho, Head of Consumer Products at Barclaycard, said: “The cost of living squeeze is clearly influencing discretionary spending habits, with figures showing a decline in subscriptions, and a drop in spending at restaurants, bars, pubs and clubs. Despite this, there are some encouraging signs, particularly in travel industry, as Brits’ appetite for going abroad continues to grow as we approach the summer holidays.