Hard-up restaurants were dealt a further blow in September, as cash-conscious Britons chose to cut back on eating out in the runup to Christmas.
A consumer survey carried out by Barclays found 44 per cent of respondents were dispensing with treats, with dining out the biggest sacrifice at 60 per cent.
Overall spending in restaurants fell by 10.8 per cent last month.
Customers chose to tighten their belts despite a warmer September than usual, which provided some relief to the hospitality sector alongside big sporting events.
Events such as the Rugby World Cup led to 6.1 per cent increasing in spending at pubs, bars and clubs, while spending on takeaways was up by 6.5 per cent.
Hard-up restaurants were dealt a further blow in September, as cash-conscious Britons chose to cut back on eating out in the runup to Christmas
A consumer survey carried out by Barclays found 44 per cent of respondents were dispensing with treats, with dining out the biggest sacrifice at 60 per cent. Overall spending in restaurants fell by 10.8 per cent last month
Jack Meaning, chief UK economist at Barclays, said: ‘Over the last few months, a picture has been building of consumers beginning to pull back on discretionary spending as the cost of living and monetary tightening from the Bank of England increasingly bite.
‘We’ve seen the warning signs from surveys, and now we see it in the more concrete spending data.’
He added: ‘This suggests the outlook for consumers, and the businesses that rely on them, is weak, even as they finally see their disposable incomes rise faster than inflation. It makes it hard to see anything but a relatively stagnant economy on the horizon.’
As the public adopts a prudent approach to spending, many respondents told Barclays they had seen examples of ‘surge pricing’ – when companies raise products’ prices during peak times.
Slug & Lettuce owner Stonegate Group said last month it would raise the price of its pint by 20p during its busiest trading hours due to rising costs
While respondents reported that bars and restaurants may be charging more when they have full houses, just one in eight people told the survey they would be willing to spend more to eat and drink out at peak times.
A number of other companies, most notably ride-hailing apps like Uber, implement surge charge fees meaning the cost of their services goes up during peak hours
Tesco still has by far the highest grocery market share at 27%, followed by Sainsbury’s at 15%
Prices across UK grocers were 11% higher than a year ago for the four weeks to October 1 (file)
Elsewhere, spending at hotels, resorts and accommodation rose by 7.9 per cent last month, the highest year-on-year growth since March. This is thought to come as consumers took advantage of the atypical warm weather in September to book last minute short breaks in the UK.
Similarly, spend at travel agents grew by 7.1 per cent, nearly double the year-on-year growth of 3.7 per cent in August.
Airlines continue to recover from the pandemic, with spending growth at 31.1 per cent compared to this time last year. This is likely due to consumers already booking holidays ahead of upcoming breaks this year and next summer.
In August, it was revealed the cost of eating out in Britain has risen by almost 15 per cent over the past year – with the average item on menus now £2.50 more expensive, according to a study.
Restaurants are increasing prices as they try to boost profits following pandemic restrictions amid high food price inflation, rising wages and energy cost increases.
Analysts at marketing consultancy Lumina Intelligence say chains are adding new pricier dishes to their offerings to boost spending, with the average number of food and drink items on menus now at 163, which is up nearly 10 per cent in a year.
MailOnline looked at examples such as the Pizza Express American Hot pizza, up from £9.95 last year to £11.95 now – a rise of 20 per cent. The McDonald’s Mayo chicken burger rose 20 per cent in February from 99p to £1.19, while the Real Greek’s Souvlaki wrap has gone up 10 per cent since last November, from £7.50 to £8.25.
Other prices checked by MailOnline included Zizzi’s spaghetti chorizo carbonara, increasing 5 per cent from £14.25 to £14.95 over the same time period.
The Nando’s quarter chicken with two sides has gone from £8.75 in January 2022 to £9.95 in January 2023 and now £10.50 – a rise of 20 per cent in about 18 months.
Lumina, analysing chains from Prezzo to Wagamama and Byron to Five Guys, said overall total food menu inflation had increased by 14.4 per cent in the past year.
This was driven by an average annual item increase of £2.47 chain restaurants. The rise at ‘quick service restaurants’ – the industry term for fast food outlets – was 69p.
Many new dishes have been priced higher than existing plates as restaurants try to drive spending per head and focus on adding new meat-based and premium dishes.
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