Spending in restaurants has continued its downward trend, marking yet another month of decline, with sales dropping by more than 10% compared to the previous month. This decrease represents the most significant decline observed this year.
Recent statistics from Barclays indicate a spend growth rate of -10.8%, with transaction growth even more subdued at -15.2%.
The data from the preceding months paints a rather bleak picture for the restaurant industry, as spending registered a negative rate of -2.5% in July and -5.8% in August.
The current month does not appear poised for a substantial improvement, given that 44% of the British population has expressed intentions to curtail their discretionary spending "in the forthcoming couple of months" as a means to bolster their finances for the approaching festive season. Among the various cutbacks, dining out at restaurants is the most mentioned adjustment.
In contrast, the pub and bar industry, along with takeaways and fast-food, exhibited more positive performance in September, as they experienced growth in spending at rates of 6.1% and 6.5%, respectively.
The Barclays report combines data from hundreds of millions of customer transactions and incorporates consumer research to offer a comprehensive insight into UK expenditure trends.
On the whole, consumer card spending demonstrated a year-on-year growth of 4.2% in September. While this figure falls short of the latest CPIH inflation rate, which stands at 6.3%, it surpasses the growth rate observed in August, which was 2.8%. This upturn can be attributed to increased in-store spending during the late summer period.
According to the report, spending at pubs and bars received a boost from the Rugby World Cup, while growth in the restaurant sector began to wane as Britons started saving money in preparation for the festive season.
In response to increasing budget-consciousness among shoppers, nearly half (47%) have observed a surge in what is commonly known as dynamic pricing, where companies raise prices for their products and services during peak periods or when demand is high.
Among those who've noticed this growing trend, one in three (32%) reported encountering higher prices for food and beverages at pubs and bars during peak times, such as evenings, weekends, and major sporting events.
Though certain pubs and bars have adopted a practice of increasing prices during busy periods, just one out of every 12 consumers (8%) are amenable to paying extra for dining and drinking during peak hours. For those who are willing to accept these "surge prices," the average premium they are willing to pay is around 70p more for a pint of beer and an additional 60p for a glass of wine.
Jack Meaning, chief UK economist at Barclays, commented:
“Over the past few months a picture has been building of consumers beginning to pull back on discretionary spending as the cost of living, and monetary tightening from the Bank of England increasingly bite. We’ve seen the warning signs from surveys, and now we see it in the more concrete spending data.
This suggests the outlook for consumers, and the businesses that rely on them, is weak, even as they finally see their disposable incomes rise faster than inflation. It makes it hard to see anything but a relatively stagnant economy on the horizon.”