Pubs saw 8% sales lift in August

Data from Barclaycard revealed restaurants and bars also benefitted from a sales increase of 6.6%, year on year.

Furthermore, the domestic travel sector also reported an uplift with staycations driving hotels, resorts and accommodation by 4.1% month on month.

However, with international travel being impacted by rising costs, travel agents and airlines fell by 5% and 2.6% respectively.

In addition, as the cost-of-living crisis bites, Brits’ confidence in their ability to spend on non-essential items fell by almost half (48%) – lower than July figures (54%) and August 2021 (63%).

Optimism about the UK economy has also dropped to just over a fifth (21%) – down from more than a quarter (26%) last month an 37% in August 2021. This was also its lowest since August 2019 when it was at 19%.

Consumer spending data

The upcoming energy price rise in October is also playing on the minds of consumers with three in 10 (32%) planning to cut down on their discretionary spending to afford energy bills during the autumn and winter. A further 21% reported they can no longer afford small luxuries as a ‘pick me up’.

A large majority (82%) believed the cost of living will continue to increase while 20% cited rising costs were having a negative impact on their mental health.

But despite these headwinds, more than half (60%) of consumers were confident in their household finances albeit down on 66% last month (July).

This could be put down to changes consumers have made to their spending behaviour to offset rising costs (26%) in preparation for the months ahead.

Cutting back

Barclaycard head of consumer products José Carvalho said: “The cost-of-living crisis is clearly leading Brits to cut back on some non-essential purchases to ensure they can afford the increasing costs of their weekly grocery shop and household utility bills.

“Yet, despite these inflationary pressures, consumers have still been keen to enjoy the summer weather by eating and drinking out and going in staycations with friends and family.

“However, an energy price rise on the horizon means the majority are understandably very concerned about whether their finances can stretch far enough to afford rising household bills.

“Many Brits plan to continue cutting back on their discretionary spending during the autumn and winter, while adopting a resource approach to saving money in order to weather a challenging period ahead.”

The current cost-of-living crisis is arguably the biggest squeeze on living standards in decades, according to financial expert and author Makala Green.

Green added: “While it’s encouraging many Brits have enjoyed the last of summer by going on staycations and supporting pubs and restaurants, the winter months ahead will place new pressures on personal finances and budgeting.

“It’s going to be incredibly important for those really feeling the pinch to pay extra close attention to their outgoings. A simple but effective way to do this is to start by reviewing and readjusting your monthly budget – at the beginning of each month, write down the cost of your essential expenses like your rent or mortgage and bills, then review all other expenses to ensure you are not overspending or paying for things you no longer need.”