Consumer spending remains steady as shoppers shrug off Brexit concerns, says research
Figures from the Cardlytics Spending Index show a surge in restaurant spending.
Cardlytics, a purchase intelligence platform, announced new insights that showed that consumer spending was resilient during the third quarter despite concerns of a post-EU referendum slowdown.
The Cardlytics Spending Index, based on the spending behaviour and shopping habits of over 10 million bank customers, revealed that overall spending is up. While overall spending fell 1.8% on the previous quarter, it was up 4% year-on-year. This growth was spearheaded by a significant increase in dining out. Spending in quick-service restaurants (QSR) leapt by 34.1% on last year and restaurants (non-fast-food) saw a 11.9% gain.
People are spending more on health and fitness. The leisure industry saw large gains, rising 11.7%.
Meanwhile, the grocery price war is pushing overall grocery spend down, benefitting restaurants. Two years ago, groceries represented nearly 27% of the UK's total spend. But Q3 2016 saw grocery's share of total spending dip below 25%. While most other sectors have remained steady, there's evidence that the restaurant industry has benefitted most, growing its share from 5% to 6.4% during that time.
The travel sector is not seeing the same positive results however. Despite the 4% year-on-year increase in overall spending, airlines (-6.5%) and travel (-16.3%) showed seasonal declines.
Overall retail spend is growing, but people are spending less on fashion. Retail spending increased by 3.7% compared with the previous year, while also increasing 1.4% on the prior quarter. However fashion purchases fell 3.1% on the last quarter.
Duncan Smith, Head of Business Development at Cardlytics UK, said: “Brands have weathered the post-referendum storm well. But with the potential for more uncertainty ahead, they'll need to work hard to keep customers coming back. This is an important time of year in the run-up to Christmas, so brands' ability to engage consumers will be crucial."
“The change in grocery's share of UK spend is significant, and telling of an industry for which price deflation has become the norm. A race to the bottom on price is unsustainable in the long-run, so grocers will need to continue building loyalty among shoppers for reasons other than cost.”
