January sees 17.5% fall in consumer spending in restaurants

Consumer spending in restaurants fell by 17.5% in January as Omicron restrictions and increasing living costs spread caution, according to the latest report from Barclaycard.

Across the whole of the hospitality and leisure sectors consumer spending fell by 6.3% after five consecutive months of growth.

The overall decline was slowed by 16-24 year olds and 25-34 year olds who continued to spend in both sectors, possibly due to being less concerned about the Covid-19 variant.

There is some positive news with a quarter of UK adults saying they plan to spend more on experiences during the winter months, and 39% of that group saying they plan to eat and drink out more often going forward.

However this may be muted by concerns over rising living costs with almost nine in 10 respondents saying they're concerned about the impact of inflation on their household finances.

Jose Carvalho, head of consumer products at Barclaycard, said: "January's Covid restrictions, combined with the rise in the cost of living, clearly impacted consumer spending levels in January.

"While restaurants and bars, pubs & clubs were inevitably hampered by the ongoing pandemic, there are signs of brighter times ahead for hospitality as Brits say they're planning to spend more on eating and drinking out to lift their spirits during the winter months.

"The lifting of Plan B restrictions should also provide a welcome boost to many sectors, as workers travel back into the office and socialise over post-work drinks, while businesses will likely start to see the benefits of increased inbound tourism on retail sales too."

Total consumer spending was up 7.4% compared to the same month in 2020, the smallest increase seen since April 2021.