Consumer spending in restaurants and in quick service restaurants dropped by 3% and 5% respectively in the first quarter of this year compared to the final quarter of 2016, according to the latest figures from the quarterly Cardlytics Spending Index.
However, the index, which is based on the spending data of more than three million active accounts of UK bank consumers tracked on a weekly basis, found that spending on restaurants and quick service restaurants increased by 8.1% and 17.7% in the first quarter of the year compared to the same period last year.
Both categories have also continued to increase their foothold in the market – share of spend for QSR is up by 0.2% and for restaurants by 0.4% compared to this time last year, according to the Index.
The research found that overall spending had weakened but remains intact. It found that seasonal dip aside (down 10% on Q4), overall consumer spending was up by 2.7% compared to this time last year and 7% compared to the same time in 2015.
It also said that there are signs that domestic trips are increasing. Hotel spending is up by 10% compared to this time last year while spending on petrol has seen a strong uplift of 14.1% despite a widespread push to lower fuel prices. Petrol’s share of spend has seen the biggest increase across all areas – 0.8% compared to this time last year.
Cardlytics aid there had been a slight drop in grocery spend compared to the first quarter of 2016, which historically picks up again later in the year. Simultaneously, there has been a 0.9% drop in share of spend, suggesting “grocery sales continue to be under pressure from the booming restaurant sector”.
The company said: “Retail spend is continuing to slow with fashion consistently dropping. With consumers increasingly moving towards experiences, the spend in fashion is down 1.2% compared to this time last year and back at being as low as in early 2015. Both categories have lost a combined 0.4% share of spend since this time last year.”
Pete Gleason, president of International Operations Cardlytics, said: “Lower prices have been generous to fuel consumer spending across the board, but there is evidence that purse strings are being tightened and people are becoming more selective. While the surge in airline spending is significant, the growing trend to spend money locally, at restaurants and hotels among other areas, presents an opportunity for brands to get creative and build relationships with existing customers and attract new ones.”