Hospitality & leisure spending grew by 9.5% in 2023, with transaction growth of 4.7%, according to Barclays.
Eating & drinking spending grew by 6.8%, but restaurant spending declined by 6.7%.
Bars, pubs & clubs spending was up 5.9% and takeaways and fast food was up by 8.1%, while ‘other food & drink’ spend grew by 9.5%.
To offset rising household bills, Barclays said Brits spent less on eating out in 2023. This comes as almost half (47%) of consumers in October said they were planning to cut down on discretionary spending so they could afford their energy bills throughout the autumn and winter, with eating out at restaurants (56%) one of the most cited areas for cutbacks.
On the other hand, pubs, bars & clubs had a strong 12 months, with growth largely driven by major public and sporting events, including the King’s Coronation and Rugby World Cup, as well as rising beer and alcohol prices.
The strong performance of pubs compared to restaurants also suggests that while out socialising Brits were opting for more affordable pub food instead of formal restaurant meals.
Barclays said while total consumer card spending increased just 4.1% year-on-year in 2023 –lower than the growth seen in 2022 (10.6%) – consumers continued to prioritise experiences, boosting travel, entertainment, and pubs & bars.
Esme Harwood, director at Barclays, said: “Brits prioritised memorable experiences and shared moments with loved ones this year, boosting pubs, travel and entertainment. Many were keen to make up for lost opportunities during the pandemic by booking holidays, treating themselves to concert tickets, and enjoying nights out with friends.
“However, certain sectors saw noticeable cutbacks. Restaurants and clothing stores were hampered by the unpredictable weather, as well as the impact of rising household bills on consumers’ personal finances. Nonetheless, Brits’ confidence in their ability to spend within their means has remained resilient, as they become more resourceful and adept in finding ways to balance their budgets.”
Jack Meaning, Chief UK Economist at Barclays: “Although 2024 will be a tough year for the economy as a whole, the New Year is a time to look for the positives. We expect to see the Bank of England start easing interest rates from the middle of the year, and in fact, we’re already seeing mortgage rates come down in anticipation. This is as the speed of price rises slows, which should continue to provide at least some boost to the spending power of people who have been squeezed through the cost-of-living crisis. 2024 will be a year of transition, from headwinds to tailwinds, but come next December we should be able to toast the New Year with more festive spirit.”
