Hospitality spending is up as overall consumer spending falls in July
Spending on hotels, restaurants and bars remained strong in July, while overall consumer spending fell for the third month in a row, according to Visa's UK Consumer Spending Index.
The 0.8% year-on-year fall in total consumer spend last month dropped slighter faster than June, when it fell by 0.2%. It is now the longest period of deterioration since a five-month run, which ended in February 2013.
However, the hospitality sector recorded the quickest increase in expenditure (up 6%), followed by miscellaneous good and services (up 4.8%) and recreation and culture, which grew by 1.3% after a fall in June.
Kevin Jenkins, UK & Ireland managing director at Visa, said that the overall figures "provides further evidence that rising prices and stagnant wage growth are squeezing consumers' pockets", with clothing, household goods, food and transport among the worst hit sectors.
He continued that hotels, restaurants and bars is likely to have benefited from "an early surge in summer staycations, as the weak pound made holidaying at home more attractive".
Visa is tracking the views of several small businesses across the UK on a monthly basis, to gauge their views on the economy and business conditions.
Josh Beer of the Illustrious Pub Company in Cambridgeshire, said: "As expected, it's been a quieter month for us, with sales down 3% on last year. We're changing our business to accommodate the shift in consumer spending habits and anticipated a slight dip.
"We've noticed that people are either willing to treat themselves to quality meals or looking for a bargain, so our marketing now emphasises our premium offering."
Visa's UK Consumer Spending Index is compiled by global analytical company IHS Markit.
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