Eating out and holidays help prop up UK consumer spending levels

Figures from the quarterly Cardlytics Spending Index show a continued long-term demand for eating out and an unprecedented spike in spending on airlines

London – 20 April 2017 – New data released today, based on the spending behaviour of more than three million bank customers, reveals that consumer spending levels in the UK remained steady in the first quarter despite fears of a slowdown.

This was driven by a boom in eating out, with quick service restaurant (QSR) spending exploding by 18% year-on-year and general restaurant spending up 8% year-on-year. This comes as part of the relentless rise of eating out, particularly in the last two years, since Cardlytics started tracking spending.

There were also signs of a Great British getaway. Airline spending saw an unprecedented spike as Brits rushed to book holidays, perhaps wary of leaner times to come. There were suggestions of an increase in domestic breaks too, with hotel and petrol spending also seeing dramatic increases alongside UK restaurant spending.

The grocery and fashion sectors were among the fallers.

The findings come as part of the Cardlytics Spending Index compiled by Cardlytics, the purchase intelligence platform. The Index reveals:

• Overall spending weakens but remains intact. Seasonal dip aside (down 10% on Q4), overall consumer spending is up by 2.7% compared to this time last year and 7% compared to the same time in 2015.
• Growth is driven by the strength of the food-on-the-go and dining out market. Both quick service restaurants (QSR) and restaurants (non-fast food) are up by 17.6% and 8.6% respectively, compared to same time last year. Both categories have continued to increase their foothold in the market – share of spend for QSR is up by 0.2% and for restaurants by 0.4% compared to this time last year.
• As people rush to book summer holidays, spending on airlines has increased the most. Spending on airlines has seen an unprecedented spike of 58.4% since the previous quarter. This is the highest since 2015 and an increase of 8.3% on this time last year.
• There are signs that domestic trips are increasing. Hotel spending is up by 10% compared to this time last year while spending on petrol has seen a strong uplift of 14.1% despite a widespread push to lower fuel prices. Petrol’s share of spend has seen the biggest increase across all areas – 0.8% compared to this time last year.
• Spending on grocery wobbles under pressure. There has been a slight drop in spend compared to the first quarter of 2016, which historically picks up again later in the year. Simultaneously, there has been a 0.9% drop in share of spend, suggesting grocery sales continue to be under pressure from the booming restaurant sector.
• Retail spend is continuing to slow with fashion consistently dropping. With consumers increasingly moving towards experiences, the spend in fashion is down 1.2% compared to this time last year and back at being as low as in early 2015. Both categories have lost a combined 0.4% share of spend since this time last year.

Pete Gleason, ‎President of International Operations Cardlytics, said: “Lower prices have been generous to fuel consumer spending across the board, but there is evidence that purse strings are being tightened and people are becoming more selective.

“While the surge in airline spending is significant, the growing trend to spend money locally, at restaurants and hotels among other areas, presents an opportunity for brands to get creative and build relationships with existing customers and attract new ones.”

Sector breakdown:

-ENDS -

Notes to editors

The figures are based on the spending data of more than 3 million active accounts of UK bank consumers. Spend was tracked on a weekly basis.

The QSR sector comprises quick-service, or fast-food, restaurants, while the restaurant category includes non-fast-food dining establishments, ranging from casual dining to high-end.

About Cardlytics

Cardlytics uses purchase-based intelligence to make marketing more relevant and measurable. We partner with major financial institutions – including Bank of America and Santander – to run their banking rewards programs that promote customer loyalty and deepen banking relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, Cardlytics has offices in London, New York, Chicago and San Francisco. Learn more at www.cardlytics.com.

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