Festive activities and celebrations boosted spending in the hospitality and leisure sector by 8.9% in December, according to Barclays data.
Christmas parties and gatherings fuelled spending growth at pubs, bars and clubs (7.9%), while restaurants, though still in decline (-8.8%), had their best month since August.
The comparatively smooth running of transport networks certainly helped the sector in December, compared to 2022 when industrial action hampered Christmas plans.
Overall consumer card spending grew 2.3% year-on-year in December – less than the latest CPIH* inflation rate of 4.2% and lower than November’s growth of 2.9%.
Retail spending struggled to maintain the momentum it had built up in November through early seasonal discounts, while entertainment and travel thrived as consumers booked experiences and getaways for 2024.
The deceleration in food price inflation meant supermarket shopping saw its lowest uplift (2.8%) since September 2022 (2.8%). This could also be due to shoppers already having stocked up on festive food and drink in November, taking advantage of early supermarket discounts and deals.
Food and drink specialist stores – including butchers and delicatessens – saw a notable uptick in spending (5.1%), as consumers chose to invest in more premium, seasonal ingredients and to support their local businesses in the run up to Christmas.
The entertainment sector saw noticeable growth (12.3%) following a -1.7% decline in November. This included shows and concerts, which grew 13.9%, as Brits snapped up tickets for Glastonbury Festival, as well as for Christmas pantomimes and shows. Meanwhile, new blockbuster releases such as ‘Wonka’ and ‘Aquaman and the Lost Kingdom’ boosted cinema spending by 8%.
Friday 22nd December saw record for transactions processed per-second, as Brits celebrated finishing work for the year in pubs and bars and sought out last-minute gifts.
Looking to 2024, nearly one in five (18%) is planning to take part in Dry January, citing being healthier (50%) and wanting to drink less alcohol (30%).
Dry January participants expect to save an average of £48.90 over the course of the month by cutting back and switching to non-alcoholic alternatives.
Karen Johnson, head of retail at Barclays, said: “Hospitality and leisure businesses will be encouraged by December’s strong growth, particularly in the entertainment category, which saw growing demand for live shows, new films and TV series.
“Meanwhile, grocery and retail spending didn’t see as much of an increase as we might have expected during the height of the festive season. This is likely due to many retailers and supermarkets starting discounts and promotional activity earlier than usual, meaning that many Brits had been making the most of these deals and completed most of their Christmas shopping by December.
“While the upcoming energy price cap is weighing on Brits’ minds, the falling rate of inflation offers a glimmer of positivity and it’s encouraging to see the nation’s optimism increase slightly as we head into a new year.”
Jack Meaning, chief UK economist at Barclays, said: “We saw inflation fall significantly at the end of 2023, and we expect it to fall further in the opening months of 2024. This puts more spending power in the pockets of UK consumers and should help support them to continue to spend, even against the tough backdrop of weak economic growth.
“It’s also encouraging to see tentative signs of an improving mortgage market; approvals have begun to rise and mortgage rates are continuing to fall. However, it’s worth remembering that many people this year will still be dropping off of fixed-term mortgages onto new deals with higher rates than they had previously, eating away at some of their newly found spending power.”
