Credit card spending figures show shift towards saving as retailers report dip in visits
Cash-strapped Britons are cutting back on eating out and reining in on buying takeaways to save up for the expensive Christmas season splurge.
The amount spent on going out to restaurants plunged 10.8% month on month in September, a significant slowdown compared with the decline of 5.8% registered in August, according to the latest UK consumer card spending figures from Barclays.
The growth in the amount the public spent on takeaways has also slowed dramatically, from 9.2% in August to 6.5% last month, as 44% of Britons surveyed said they are starting to reduce discretionary spending to pay for Christmas.
Dining out in restaurants has proved to be the main belt-tightening target, and 60% of those surveyed said that cutting back on dining out is the most frequently cited way of boosting the household budget in preparation for the festive season.
The swing towards saving was also reflected in monthly footfall figures, in which there was an almost 3% fall in visits to the high street, retail parks and shopping centres last month, according to the British Retail Consortium.
Shopping centres and retail parks suffered the largest declines in footfall, down 4% and 2.4% respectively month on month compared with August.
“Rather than the traditional back to school boost to shopper traffic we would normally expect to see in September, footfall remained subdued as consumer caution on discretionary spending stayed high, perhaps prompted by shoppers withholding spend to save ahead of the golden [retail sales] quarter and Christmas,” Andy Sumpter, a retail consultant at Sensormatic Solutions, said.
Two-fifths of consumers believe Christmas will be more expensive this year, and a fifth are already starting to buy presents to spread the cost.
Almost one in five (18%) have already had chats with loved ones about agreeing to cut back on gift-giving this year.
Despite the slowdown, overall consumer card spending grew 4.2% in September, less than the 6.3% rate of inflation, as the cost of goods continues to climb.
Spending on essential items increased significantly, from a 1% rise in August to 4.6% last month, with an 11% increase in spend on fuel.
While food prices fell for the first time in two years in September, grocery spend continued to accelerate, at 7%, up from a 4.5% increase in August.
“Grocery spending tapered off over the summer, thanks to the long-awaited drop in food price inflation,” Esme Harwood, a director at Barclays, said. “Worryingly, the growth sped up again in September, which could be an early warning sign that food prices may not come down as quickly as we’d hoped.”
Three-quarters of consumers say they are aware of shrinkflation, in which supermarkets maintain or raise prices on products on which they have reduced the size or weight, and 68% said chains should label such items.
Pubs and bars received a welcome fillip from the start of the Rugby World Cup, which this weekend enters the quarter-final stages featuring England, Ireland and Wales, with spend up by 6.1% last month. In August, before the start of the World Cup, spend rose 2.8%.
Source: The Guardian
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