Spending in restaurants, bars and hotels increased in January compared with last year despite consumer spending growth slowing to a five-month low, according to the latest data from Visa.
Consumer spend weakened to a 0.4% increase year-on-year in January, from a 2.5% rise in December.
However, restaurants bars and hotels saw spending growth increase 5.7% year-on-year while food and drink remained unchanged.
Face-to-face spending declined at its quickest rate in four years (-3.1%), while e-commerce continued to rise, albeit at a slower pace (+4.1%). Four of the eight broad-spending categories – clothing and footwear, household goods, health and education, and transport and communication – saw drops in expenditure. Clothing and footwear saw its biggest fall in spend since April 2012 (-3.8%).
Besides the pub, restaurant and hotel category, only recreation and culture (3.1%) and miscellaneous goods and services (0.6%) saw increases in spend compared with the previous year.
Visa UK and Ireland managing director Kevin Jenkins said: “Following a bumper Christmas season, there were signs that consumers were starting to reign in their spending at the start of the new year. Annual growth slowed down from 2.5% in December to a five-month low of 0.4% in January, as households monitored rising prices on everyday items and how this would impact disposable incomes. Clothing and household goods retailers experienced a particularly difficult January.
“The traditional start of year sales did little to lift clothing spend, which saw the biggest drop in nearly five years. The high street as a whole suffered a disappointing month too, with spend falling at the quickest rate in four years. Face-to-face wasn’t all doom and gloom in January though, and winners on the high street did emerge. Brits continued the trend of spending on experiences rather than goods, with a near 6% spending boost in the hotels, restaurants and bars sector and a 3.1% lift in recreation and culture spend.”
