Spending on takeaways and eating out fell in May, according to the latest Consumer Spend research from Barclays.
Brits reined in spending on takeaways and fast food in May with the category experiencing a 0.2% fall compared to April, the first decline in four years. This comes as 44% say they are reducing their discretionary spending, citing ordering takeaways (54%) as their number one cutback.
Over half (53%) of these consumers are also cutting back on eating out at restaurants, with spending in this category seeing an even greater decline in May (-15.7%) than in April (-13.1%).
Travel, another of the UK’s typically more resilient sectors, also had a challenging month, as did Entertainment spending.
Spending at supermarkets grew just 0.3% – the lowest growth since June 2022.
Consumer card spending grew just 1.0% year-on-year in May, the smallest rise since February 2021 and significantly lower than the latest CPIH inflation rate of 3.0%.
April’s price hikes on certain essentials and household bills – including council tax and broadband – have started to impact consumer confidence. The vast majority (87% are worried about the impact of rising household bills on their personal finances, with increasing council tax (80 per cent), broadband and mobile costs (79%), water bills (76%), and dental costs (75%) among the top concerns.
The weather continued to cast a cloud over the high street. However, consumers are feeling optimistic about the latest inflation figures, with almost three in 10 (28%) Brits saying they will spend more when the weather improves this summer – a figure which rises to 39% for 18 to 34 year-olds.
Two fifths (39%) of this group plan to spend more on food and drink for picnics, a third (34%) say they’ll fork out on drinking and dining al fresco at pubs and restaurants, and 29% intend to buy barbeque supplies to host friends and family in the coming months.
Karen Johnson, head of retail at Barclays, said: “Retailers faced a challenging May, yet the few sunnier days in the month did bring a welcome uptick in footfall. As consumers gear up to spend more with better weather, and with the Euros, Wimbledon, and Taylor Swift’s ‘Eras Tour’ on the horizon, there’s a brighter outlook for the coming months.”
Jack Meaning, Chief UK Economist at Barclays, said: “The economic strength we saw in the first three months of the year was always expected to ease as we moved into the second quarter, with GDP having seen the extra bounce needed to recover the ground lost in last year’s recession. The underlying direction of travel remains though, with falling inflation, real income growth and low unemployment all pointing to a gradual acceleration in consumer spending over the next 12 months, especially as we begin to see the Bank of England reduce interest rates in H2.”
