UK Consumer Spending Report

Hospitality and Leisure

The colder weather boosts spend on at-home experiences

The colder weather resulted in a positive month for “insperiences” (i.e. at-home experiences), with overall spend in this category rising by 5.3% in June 2024. Spend on Takeaways and Fast Food increased by 4.4%, returning to positive growth after declining in May 2024 (-0.2%), whilst spend on Digital Content & Subscriptions rose by 9.2%. This was partly due to “streamflation” (the rising price of streaming subscriptions) taking effect, combined with the popularity of new series such as ‘Bridgerton’.

Meanwhile, Pubs, Bars & Clubs saw modest growth, at 0.5% in June 2024, with the influx of sports fans watching The Euros outweighing the bad weather, and keeping the category on par with its strong performance in June last year.

However, spend at Restaurants fell by -11.5% year-on-year. Although this was an improvement on May 2024 (-15.7%), this reflects the selective approach cost-conscious consumers are taking to discretionary spending, with 52% of those cutting back on non-essential spending opting to spend less on eating out at restaurants. **

Consumers continued to spend on overseas travel in June 2024, with spend at Travel Agents and Airlines rising by 5.5% and 3.2% respectively, whilst spend at domestic Hotels, Resorts and Accommodation declined by -1.8%. This comes as some consumers settled the final costs for their getaways, whilst 37% of consumers also said that when they go on holiday, they tend to spend more than they had planned to, with 20% adopting a “treat yourself” attitude when travelling.**

The Entertainment sector also had a strong month, with spend rising by 6.1%. This was helped by a mid-month boost to cinema spending, as cinemas enjoyed their busiest day of the year so far on 15th June, with spend up 122.4% in comparison to the average day in 2024, after the release of ‘Inside Out 2’.

Retail

The weather continues to dampen Retail sales

The cold in early June 2024, in contrast to 2023’s sunshine and warm weather, resulted in overall Retail spending falling by -2.6% in June 2024. This is the lowest year-on-year growth since June 2022 (-3.8%), as high-street cutbacks led to in-store spending (excluding groceries) and clothing sales declining by -5.1% and -7.7% respectively.

This comes as 39% of consumers say that they have spent less than usual on summer products this year, due to the weather, with clothes (55%) emerging as the main area consumers have cut back on, followed by barbecue equipment and food (40%). **

Consumers have also been put off home and garden renovations due to the cold snap, with spend on Home Improvements & DIY declining by -9.4% in June 2024, whilst spend at Garden Centres saw a steeper drop of -12.7%. However, Pharmacy, Health & Beauty stores had another positive month, with spend rising by 5.8%. This is due to several factors including the “lipstick effect”, a growing interest in personal wellness, and the influence of viral makeup and skincare videos.

Spend growth at Supermarkets fell by -2.6% in June 2024, the lowest year-on-year growth since April 2022 (-4.5%). This slowdown is partly attributed to the particularly high food price inflation seen in June 2023 (14.6%), which has now fallen to its lowest point since October 2021 (1.7%). Encouragingly, 36% of shoppers say that they have noticed that food prices have been rising at a slower rate in recent months.**

Nonetheless, the majority of consumers (65%) say they are continuing to cut back on their weekly grocery expenditure, with 52% of these budget-conscious shoppers looking out for loyalty scheme discounts and supermarket deals.**