Spending in hotels, restaurants and bars was up by 8.9% year-on-year in July, the first full month since the UK’s “Brexit” vote, making it the strongest performing sector, according to Visa.
That was a noteworthy rise on June’s figure of +3.4% year-on-year and significantly stronger than the increase in overall consumer spending, which was up 1.6% year-on-year in July.
Overall spending was up 0.8% in May, and rose 0.9% in June. However the 1.6% seen in July is still lower than the average growth rate in the past two years, of +2.4%.
Kevin Jenkins, UK & Ireland Managing Director at Visa commented:
“July’s data suggests that UK consumer spending is holding up despite the ongoing uncertainty following the referendum, albeit at lower levels of growth than we’ve seen in the last couple of years. Looking at the last three months, the Index indicates that consumers remain cautious with their spending. Overall growth is hovering nearly one percentage point below the average seen over the past two years.
“Looking at the sectors, the longer term trend we’ve seen for increased spending on leisure and recreation is enduring. And the high street saw its strongest annual growth rate in five months with clothing retailers in particular bouncing back after a fall in June.”
What UK businesses are saying:
Visa is tracking the sentiment of several small businesses across the UK on a monthly basis, asking about their views on the economy, business conditions and forecasts for the month ahead.
Josh Beer, The Illustrious Pub Company, Cambridgeshire:
Overall, this was a good month for us with revenue up 6.2% compared to last month. A lot of this was due to the performance of our outdoor catering business, as we were called in to provide food for BBQs, weddings and corporate summer parties.
Sales at our pubs also benefited from the Euros and July’s heatwave. In our site where a large screen TV had been installed sales surged, and among our locations, those that allowed customers to dine al fresco were the best performers.