According to recent data from Barclays based on customer transactions, more than half of consumers (54%) are reducing their discretionary spending due to rising household bills.
Among the areas where consumers are cutting back, eating out at restaurants saw a drop of 5.6% in spend last month, with 62% of consumers reducing their spending in this category.
The survey also found that 36% of respondents are cooking more at home instead of eating out, and 21% are avoiding social plans that involve eating out in order to save money.
Although 35% of Brits plan to spend on activities over the upcoming King's coronation bank holiday weekend in May, the survey found that consumers are feeling less confident in their household finances (59%) and ability to spend on non-essential items (48%) than they did in February.
The data also showed that only 8% of consumers plan to spend money on drinks in pubs and bars during the upcoming bank holiday weekend.
In response to the anticipated lower spending, the UK government has extended licensing hours for pubs, clubs and bars by two hours across the weekend. The extension will be in effect from 11pm to 1am on Friday 5th, Saturday 6th, and Sunday 7th May 2023, during the bank holiday coronation weekend.
Additionally, 88% of consumers are concerned about the impact of rising household bills on their finances, as spending on utilities rose 39.3% year-on-year in March.
Moreover, after the UK government's announcement that the Energy Price Guarantee would be extended beyond April, 59% of consumers expressed relief about the extension, but expressed continued concerns about their ability to afford energy bills after June.
Esme Harwood, director at Barclays, commented:
"The below-inflation rise in grocery spending shows that Brits are still trying their hardest to shave money off their weekly shop as energy bills continue to rise. Cutbacks are also impacting restaurants, with a number of cash-strapped consumers even avoiding social plans that involve meals out.
Hospitality and leisure businesses will be hoping that the busy Bank Holiday period provides a boost to counteract consumers' everyday cost-savings. While predictions for the Coronation weekend are lacklustre, the results from Mother's Day are more encouraging, demonstrating that Brits are still taking advantage of one-off moments to go out and celebrate."
Silvia Ardagna, head of European economics research at Barclays, added:
"Inflation remains stubbornly high, with food and beverage prices up notably in February, and driving the sharp acceleration in prices set by restaurants and hotels.
In this light, it is not surprising that consumers are moderating spending in these categories. But, with the decline in energy prices, we also expect a fast deceleration in food prices, which should provide some support to households' consumption and allow the UK to experience just a mild recession in the first half of 2023."