Solid fuel restaurants were dealt another blow in September as cash-conscious Brits opted to cut back on eating out in the run-up to Christmas.
A consumer survey by Barclays found that 44 per cent of respondents are giving up treats, with diners the biggest victim at 60 per cent.
Total restaurant spending was down 10.8% last month.
Customers preferred to tighten their belts despite a warmer-than-usual September, bringing some relief to the hotel sector alongside major sporting events.
Events such as the Rugby World Cup led to a 6.1% increase in spending in pubs, bars and clubs, while spending on takeaways increased by 6.5%.
Solid fuel restaurants were dealt another blow in September as cash-conscious Brits opted to cut back on eating out in the run-up to Christmas
A consumer survey by Barclays found that 44 per cent of respondents are giving up treats, with diners the biggest victim at 60 per cent. Total restaurant spending was down 10.8% last month
Jack Meining, chief UK economist at Barclays, said: “Over the past few months, a picture has been building of consumers starting to pull back from discretionary spending as the cost of living and the tightening of monetary policy by the Bank of England increasingly bite .
“We saw the warning signs from the surveys, and now we’re seeing them in the more specific spending data.”
He added: “This suggests that the outlook for consumers and the businesses that rely on them is dim, even as they finally see their disposable income rise faster than inflation. That makes it hard to see anything but a relatively stagnant economy on the horizon.
As the public embraces a sensible approach to spending, many respondents told Barclays they have seen examples of “surge pricing” – where companies raise the prices of products during peak hours.
Slug & Lettuce owner Stonegate Group said last month it would raise the price of its pint by 20p during peak trading hours due to rising costs
While respondents reported that bars and restaurants may charge more when they are full, only one in eight people said in the survey that 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, are introducing surge charges, meaning the price of their services rises during peak hours
Elsewhere, spending at hotels, resorts and lodging rose 7.9 percent last month, the biggest annual increase since March. This is believed to be happening as consumers took advantage of September’s unseasonably warm weather to book last-minute short breaks in the UK.
Similarly, spending at travel agencies rose 7.1%, almost double the year-on-year growth of 3.7% in August.
Airlines continue to recover from the pandemic with spending up 31.1% compared to this time last year. This is likely due to consumers already booking vacations ahead of upcoming vacations this year and next summer.
In August, it was revealed that the cost of eating out in Britain has risen by almost 15 per cent in the past year – with the average menu item now £2.50 more expensive, according to research.
Restaurants are raising prices as they try to boost profits after pandemic restrictions amid high food price inflation, rising wages and increases in energy costs.
Analysts at marketing consultancy Lumina Intelligence say chains are adding new pricier dishes to their offerings to drive up costs, with the average number of food and drink items on menus now at 163, up nearly 10 percent in a year.
MailOnline looked at examples such as Pizza Express American Hot pizza from £9.95 last year to £11.95 now – a 20 per cent increase. McDonald’s Mayo chicken burger rose 20 per cent in February from 99p to £1.19, while Real Greek’s souvlaki rose 10 per cent since last November from £7.50 to £8.25.
Other prices checked by MailOnline include Zizzi’s spaghetti chorizo carbonara, up 5% from £14.25 to £14.95 over the same period.
A quarter of Nando’s chicken with two sides has gone from £8.75 in January 2022 to £9.95 in January 2023 and is now £10.50 – a 20 per cent rise in around 18 months.
Lumina, analyzing chains from Prezzo to Wagamama and Byron to Five Guys, said overall overall food menu inflation had increased by 14.4% over the past year.
This is due to the average annual item increase of £2.47 in chain restaurants. The increase in “quick service restaurants” – the industry term for fast food – was 69p.
Many new dishes are priced higher than existing dishes as restaurants try to drive up spending per head and focus on adding new meat and premium dishes.
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