Travel defied a downturn in consumer outlay last month with spending growth at travel agents and airlines way ahead of all other sectors.
March card spending data released today (Tuesday) by Barclays shows consumers making further cutbacks to cope with the cost of living crunch – with the exception of travel with overall year-on-year spend growth of more than 24%.
Within this, travel agents achieved the highest level of spending growth across all but one of the sectors monitored at 30.1%, with transaction growth of 33.8%.
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Spending on airlines rose by 28.5% with a 23% transition growth.
This contrasted with a 3.3% decline in spending on hotels, resorts and accommodation.
Only spending on utilities outstripped travel agents at 39.3% as the cold weather persisting into March meant households kept their heating on, according to the research covering 2,000 respondents.
The study found that consumer card spending grew just 4% year-on-year in March, less than half the latest consumer prices index inflation rate of 9.2%.
Barclays director Esme Harwood pointed to a below-inflation rise in grocery spending as showing “that Brits are still trying their hardest to shave money off their weekly shop, as energy bills continue to rise.
“Cutbacks are also impacting restaurants, with a number of cash-strapped consumers even avoiding social plans that involve meals out.
“Hospitality and leisure businesses will be hoping that the busy bank holiday period provides a boost to counteract consumers’ everyday cost-savings.
“While predictions for the Coronation weekend are lacklustre, the results from Mother’s Day are more encouraging, demonstrating that Brits are still taking advantage of one-off moments to go out and celebrate.”
The bank’s head of European economic research, Silvia Ardagna, added: “Inflation remains stubbornly high, with food and beverage prices up notably in February, and driving the sharp acceleration in prices set by restaurants and hotels.
“In this light, it is not surprising that consumers are moderating spending in these categories. But, with the decline in energy prices, we also expect a fast deceleration in food prices, which should provide some support to households’ consumption, and allow the UK to experience just a mild recession in H1 ’23.”
More: Spending on holidays and flights outpaces other sectors
Robust trading ‘set to continue’ despite squeeze on consumers’ spending