Brexit impacts on consumer spending, hotels, pubs and restaurants feel the impact of cutbacks
Consumer spending grew by 1.2 per cent year-on-year in February, equating to a decline in real terms when adjusting for inflation. Half of UK adults (50 per cent) state that Brexit will have a negative impact on the UK economy and cause their personal finances to suffer.
Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, shows that essential expenditure rose by 2.3 per cent, propped up by relatively modest growth in supermarkets of 2.5 per cent as petrol spending contracted by 1.2 per cent.
Non-essential spending, meanwhile, saw growth of just 0.8 per cent. Spending on clothing contracted by 5.2 per cent, while department stores saw another month of decline of 5.5 per cent.
After consecutive months of growth, hotel spending saw a contraction of 3.8 per cent. Pubs and restaurants, traditionally both strong categories, were also not immune –reporting unusually low growth of 7.4 and 3.9 per cent respectively.
This drop in spending may be due to consumers re-evaluating their budgets. Almost one in three Britons (32 per cent) say they are cutting back on non-essential items (such as eating out or buying new clothes), or shopping more often at discount stores in order to make their money go further.
Ongoing economic uncertainty means many consumers continue to take a cautious approach to spending. Half of UK adults (50 per cent) worry that Brexit will have a negative impact on the UK economy and cause their personal finances to suffer. 53 per cent are also concerned that a rise in the cost of everyday items over the next month will impact their spending.
Furthermore, almost one in five Brits (18 per cent) have started stockpiling essential food items in case of shortages in the near future.
Esme Harwood, Director at Barclaycard, said: “Uncertainty over Brexit appears to be driving a shift in behaviour, with many Brits worrying about price rises and cutting back on non-essential spend, and some even stockpiling everyday items.
“Discretionary expenditure has seen a considerable decline – spending at retailers continues to decrease, and even hotels, pubs and restaurants are feeling the impact of cutbacks.”