The month-on-month drop is partly a reflection of the sector’s strong performance in June due to the Jubilee period.
While the eating and drinking out category is up 9% year-on-year, a recent survey from Barclaycard found that 67% of respondents planned to cut back on eating out this summer.
The drop between June and July comes as 29% of Brits report they plan to spend less on social plans this summer.
International travel also saw a decline compared to June as 16% of Brits opt to holiday within the UK, while the popularity of staycations drove a 1.9% uplift in spend in the hotels, resorts, and accommodation category.
Despite the month-on-month drop in hospitality and overseas travel, overall spend on non-essential items rose 1.3% compared to June and 8% year-on-year, attributed to a combination of inflation, hot weather, and summer and school holidays.
Consumer confidence levels saw a month-on-month uplift, with 54% of Brits feeling confident in their ability to spend on non-essential items, compared to 48% in June. However, confidence remains below July 2021 levels.
Confidence in the future of the UK economy remains low at 26%, with 91% of people concerned about rising inflation, higher food prices, and surging household bills.
Spending on essential items grew 7% year-on-year as fuel and food prices continue to climb.
