Consumers cut their spending on holidays last month, as rising inflation took its toll on family budgets.
Debit and credit card data from Barclaycard showed a 7.7% rise in overall spending in July compared to a year earlier. Overall spending was up 1.6% compared to June.
However, spending on international travel and hospitality dropped compared to a month earlier, falling 3.8% in travel agents and 3% at airlines.
Barclaycard said: “This is likely due to the ongoing disruption across the aviation sector, as well as the 20% of Brits who are choosing not to summer holiday abroad this year, and the 16% instead opting to take a break in the UK.
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“The popularity of staycations is driving spend in the hotels, resorts & accommodation category, which grew 1.9 per cent compared to June.”
José Carvalho, head of consumer products at Barclaycard, commented: “July saw Brits get into the swing of summer by prioritising non-essential spending on staycations, new clothes and beauty products, while the heatwave gave an extra boost to the electronics sector, as consumers bought gadgets to keep cool.
“However, inflation continues to have a noticeable impact, with price rises forcing shoppers to spend more on essential everyday items such as fuel, butter and milk, and to cut back on some discretionary experiences such as meals and drinks out, and holidays abroad.”
Meanwhile, figures from the British Retail Consortium show that retail sales increased by 2.3% year-on-year in July.
Helen Dickinson, BRC chief executive, said: “Sales improved in July as the heatwave boosted sales of hot weather essentials.
“However, with inflation at over 9% many retailers are still contending with falling sales volumes during what remains an incredibly difficult trading period.
“Consumer confidence remains weak, and the rise in interest rates coupled with talk of recession will do little to improve the situation.
“The Bank of England now expects inflation to reach over 13% in October when energy bills rise again, further tightening the screws on struggling households. This means that both consumers and retailers are in for a rocky road throughout the rest of 2022.”
Picture credit: Colin Burdett/Shutterstock
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