Hotel, restaurant and bar spending rises in January

Hotels, restaurants and bars once again saw strong spending increases in January 2017, outperforming other sectors as consumers continued to spend on experiences.

Spending on hospitality businesses rose 5.7% year on year in January. That compared to a 3.1% increase for recreation and culture, and a sluggish 0.4% rise in spending overall, according to Visa’s Consumer Spending Index.

Compiled by Markit, the Index is distinct from Visa’s business performance and reflects overall consumer spending, not just that on cards.

Meanwhile, clothing & footwear saw its biggest drop in spend since April 2012, with a 3.8% fall in spending year-on-year.

Kevin Jenkins, UK & Ireland managing director at Visa said: “Following a bumper Christmas season, there were signs that consumers were starting to rein 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.

“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.”

Josh Beer, of the Illustrious Pub Company, Cambridgeshire, said: “As expected, January was a quieter month for us with turnover down 5% compared to last year. While our catering orders remained steady, customers who came to dine and drink at our pubs were spending more cautiously. The cold weather and icy driving conditions might have kept quite a few of our regulars at home too, and our figures support this, as our locations with easier pedestrian access were the best performers.

Quan Nguyen, owner of the Chi Café, London added: “January was a rather quiet month for us, with sales slowing down from December. We had fewer customers through the door, and on average people seemed to spend less too. We thought this might be due to people cutting back on spending following an indulgent December, but there might be other factors at play. At the same time, we began to feel the squeeze as our main suppliers had all increased their prices.”

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