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Consumer spending rises 2.5% as the warm weather entices shoppers to visit UK pubs and restaurants

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Here's to a long hot summer: retailers hope that shoppers will come out with the sun
Here's to a long hot summer: retailers hope that shoppers will come out with the sun
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Lovely weather brings shoppers out – a boon for restaurants and pubs, says Barclaycard

UK consumers took advantage of the sunshine last month, resulting in double-digit growth for pubs and restaurants. However, the wider retail sector continued to face challenges, with spending on clothing, electronic stores and department stores contracting.

 

Delayed Brexit and a warm Easter contributed to increasing consumer confidence, suggests data from Barclaycard, with spending up 2.5% year on year. Airline spending however descended into negative territory at -4.8%– the lowest figure recorded since Barclaycard started tracking this data.

 

Data from Barclaycard, which sees nearly half of the nation’s credit and debit card transactions, shows that essential expenditure grew by 6.2% in April, bolstered by a strong performance from supermarkets (5.8% growth) and an increase in petrol spending of 4.9%.

 

Non-essential spending overall saw more muted growth of just 1.2%. However, one category that did perform very well was pubs and restaurants, which reached double-digit growth of 13.1 and 10.0% respectively – as Brits made the most of the sunny bank holiday by relaxing and dining out.

 

Garden centres were also a bright spot, with the unseasonably higher temperatures last month contributing to a rise in spending of 16.2%. Yet, the wider retail sector continued to face challenges, as spending on clothing contracted by 5.2%, as did electronic stores and department stores at 2.0% each.

 

The Brexit delay, along with warmer weather over the Easter weekend, may be contributing factors to a slight increase in consumer confidence. April saw a rise to 33% of consumers feeling confident in the UK economy, compared to 26% in March.

 

Furthermore, over a quarter of Brits (27%) admitted the sunshine in April had encouraged increased expenditure. Just under a fifth of UK (19%) adults also said they spent more money than usual on leisure and experiences during Easter. Half of these consumers opted to eat out (52%) or enjoy day trips with family and friends (48%).

 

Looking forward, many continue to remain cautious with their money, as six in ten (61%) expect no change to their spending plans for May. In addition, only one in ten suggested they are likely to spend on big-ticket items due to the delay in Brexit, indicating consumers remain hesitant to loosen their purse strings.

 

Esme Harwood, Director at Barclaycard, comments: “Warmer temperatures, especially over the Easter weekend, led many consumers to spend on experiences and dining out. Overall consumer spending in April has remained relatively modest, with the retail sector continuing to struggle. While the Brexit delay seems to have brought some short-term relief to consumer confidence, it’s clear that many shoppers still remain cautious about making any big-ticket purchases such as holidays, a new car or investing in home improvements.”

 

The figures come as the latest BRC-KPMG retail sales monitor for April 2019 shows that while there was a bit of balmy April bounce, year-on-year like-for-like retail figures aren’t good. While BRC-KPMG found that, while

retail sales increased by 4.1% in April, against a decrease of 3.1% in April 2018, the late Easter has skewed the figures. To get a true picture, it says, the figures have to be compared over two years, which moves Easter back.

 

With this in mind, BRC-KPMG suggests that a two-year average growth was 0.4% per annum, a slowdown from March’s equivalent of 0.9%.

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