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Card spending up 4% but more Brits avoid restaurants to save money

Rebecca Goodman
Written By:
Rebecca Goodman
Posted:
Updated:
11/04/2023

There was a 4% rise in card spending in the UK since March of last year, with increases on grocery shopping, digital content and utility bills, according to new data.

Shoppers spent 7.1% more on food products and 39% more on utilities, areas that have seen inflation spiral higher during the cost-of-living crisis.

Spending on digital content and online TV and film subscription services saw its highest growth since October 2022, according to survey data from Barclays.

Rising prices are causing concern for 88% of consumers and 62% said they were finding ways to cut back the cost of their weekly food shop.

Over half of consumers are cutting back on luxuries and 38% said they were planning meals in advance and using vouchers to save money.

Fall in dining out as consumers cut back

To combat rising prices, 62% of consumers said they were eating out less in restaurants and 63% said they were cutting back on buying clothes and accessories. Spending at restaurants fell by 5.6% in the year to March 2023 and clothing shops saw a fall of 3.4%.

Over a third of consumers are cooking more at home rather than eating out and 21% said they were trying to save money by avoiding social plans that involved eating.

While spending on groceries rose 7.1%, this is significantly lower than the latest food price inflation rate of 18.2% from the Office of National Statistics (ONS).

There was a fall of 6.7% on fuel spending, mainly because prices have dropped significantly since the Russian invasion of Ukraine last year.

Strike action has pushed the rate of increased spending on public transport down slightly, rising by 14% in the last year to March compared to a 22.6% rise in the year to February and 37.9% rise in the 12 months prior to January.

Rising energy bills are a concern

Spending on utility bills rose by almost 40% in the year to March and 88% of consumers said they were worried about the impact of rising household bills.

However, the decision by the Government to continue the Energy Price Guarantee was welcomed: 59% of those surveyed  by the bank said they were pleased but worried about how they would afford their bills when the guarantee comes to an end.

Because wholesale energy prices have begun to fall and the weather has started to warm up, 58% of consumers said they were hopeful their energy bills would be lower this year, but they also worried about how they would afford them this autumn and winter.

Consumers aged 16 to 24 spent more on discretionary purchases compared to those aged over 25. The younger group spent twice as much as the older consumers on fast food and takeaways and the older consumers spent nearly six times as much on home improvements and DIY products (spending at DIY shops rose 4.3%).

Spending on online TV services, such as Netflix and Amazon Prime, rose 4.1% annually. This is the highest annual uplift in five months, partly because of the release of new seasons of several popular shows including ‘Succession’ and ‘Ted Lasso’.

‘Inflation remains stubbornly high’

Silvia Ardagna, head of European economics research at Barclays, said: “Inflation remains stubbornly high, with food and beverage prices up notably in February, and driving the sharp acceleration in prices set by restaurants and hotels.

“In this light, it is not surprising that consumers are moderating spending in these categories. But, with the decline in energy prices, we also expect a fast deceleration in food prices, which should provide some support to households’ consumption, and allow the UK to experience just a mild recession in H1 23.”