February sees 'considerably smaller' uplift in consumer spending

09-Mar-2023 - Last updated on 24-Mar-2023 at 14:16 GMT

Considerably smaller uplift: consumer spending in pubs and bars saw small increase in February than in January (Credit: Getty/Hispanolistic)

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Pubs, bars and clubs saw a “considerably smaller” uplift in consumer spending last month compared with January, the latest figures from Barclaycard have revealed.

The data from Barclaycard, which looks at nearly half the nation’s credit and debit card transactions, showed a 7.7% rise in year-on-year consumer spending at pubs in February 2023, compared with 18.1% the previous month, while restaurants saw a 3% decline vs the same period last year.

Moreover, as spending on utilities grew by 43.2%, around six in 10 (58%) consumers cut down on discretionary spending, with 28% intending to scale back hospitality visits over the upcoming Easter celebrations.

Taper off

Barclays director Esme Harwood said: “Several categories saw their growth taper off last month, especially those in the hospitality and leisure sector.

“This is partly because they couldn’t match the pent-up demand witnessed at the end of last year’s restrictions, and also due to the ongoing cutbacks brought on by the cost-of-living squeeze.”

However, Barclaycard noted February 2022 the comparisons were impacted by the Omicron variant of Covid, which last year caused a spike in spending due to pent-up demand, bringing down this year’s figures.

Overall consumer card spending grew 5.9% year-on-year last month, below the latest CPIH inflation rate of 8.8%, owing to the "considerably smaller" level of discretionary spending amidst the ongoing the cost-of-living squeeze, according to Barclaycard.

Elevated inflation

Despite this, consumer confidence in household finances remained steady at 64%, while optimism in the future of the UK economy increased slightly to 24%, up from 21% last month.

Barclays head of European economic research Silvia Ardagna said: “The UK economy flirted with a recession in the second half of last year as real GDP declined in Q3 and was virtually flat in Q4.

“Persistent elevated inflation continues to take a toll on spending, as indicated by the figures, which could prolong the headwinds.

“However, some survey indicators for consumer confidence, and the recent business activity in the manufacturing and services sectors both point to tentative signs of a rebound.”