Festive parties push spending up by almost 8%

09-Jan-2024 - Last updated on 09-Jan-2024 at 09:29 GMT

Looking ahead: tentative signs of an improving mortgage market is one positive that could come in 2024, according to Barclays (image: Getty/Tassii)

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Consumer spending at pubs, bars and clubs was up by 7.9% in December, thanks to Christmas parties and gatherings, research has found.

Furthermore, restaurants had their best month since August despite an 8.8% decline in the last month of 2023.

The latest Barclays Consumer Spend report revealed this culminated in spending on non-essential items having increased by 2.5%, with the festive activities and celebrations having boosted the overall hospitality and leisure sector by 8.9%.

Elsewhere, entertainment saw noticeable growth (up 12.3%) following a decline of 1.7% in November.

Meanwhile, the data also showed almost a fifth (18%) of Brits were planning to abstain from alcohol in January with half (50%) citing being healthier as the reason, 42% putting it down to saving money and just under a third (30%) wanting to drink less alcohol.

Festive season

The survey also looked at consumer confidence. With the energy price cap rise on 1 January playing on Brits’ minds, 87% reported they were worried about the impact of rising household bills on their personal finances.

Barclays head of retail Karen Johnson said: “Hospitality and leisure businesses will be encouraged by December’s strong growth, particularly in the entertainment category, which saw growing demand for live shows, new films and TV series.

“Meanwhile, grocery and retail spending didn’t see as much of an increase as we might have expected during the height of the festive season.

“This is likely due to many retailers and supermarkets starting discounts and promotional activity earlier than usual, meaning many Brits had been making the most of these deals and completed most of their Christmas shopping by December.

“While the upcoming energy price cap is weighing on Brits’ minds, the falling rate of inflation offers a glimmer of positively and it’s encouraging to see the nation’s optimism increase slightly as we head into a new year.”

Tentative signs of improvement

Improvements in the economy gives a glimmer of lights to business and consumers, according to Barclays chief UK economist Jack Meaning.

He said: “We saw inflation fall significantly at the head of 2023 and we expect it to fall further in the opening months of 2024.

“This puts more spending power in the pockets of UK consumers and should help support them to continue to spend, even against the tough backdrop of weak economic growth.

“It’s also encouraging to see tentative signs of an improving mortgage market – approvals have begun to rise and mortgage rates are continuing to fall.

“However, it’s worth remembering many people this year will still be dropping off fixed-term mortgages onto new deals with higher rates than they had previously, eating away at some of their newly found spending power.”