Spending in restaurants, takeaways and cafés has more than doubled (+102%) in the last decade, according to a new report by the Payments Council in the UK.
‘The Way We Pay’ reveals £58bn (€67bn) was spent on entertainment in 2011, a rise of 60% on 2001 and almost one and a half times as much as we forked out for gas and electricity (£34bn/ €40bn).
While pubs and bars have lost out with consumers spending just 7% more on going out for a drink, supermarkets have certainly benefited. For every pound spent in the retail sector, 58p/67cent now goes to supermarkets, up from 46p/53cent ten years ago.
As supermarkets have expanded their range of goods and discounted heavily, spending in furniture and homeware shops is down by nearly half, newsagents have lost nearly a fifth of their trade, and spending in DIY stores is down by nearly half.
It’s not just what consumers are buying that has changed, but also how they are paying too. Cheque usage continues to fall, halving every five years, hand-in-hand with consumers’ reliance on cash – particularly for regular payments and higher value spontaneous payments.
For example in 2001, 43% of consumers’ retail spending by value used notes and coins. By 2011, only 30% of shopping was paid for in this way (with the majority of payments being under £5/€6).
The rise of the laser card has been responsible for the decline of cash on the high street – indeed debit card spending has risen almost fourfold since 2001.
Consumers continue to make a lot of very small cash transactions, however this is predicted to change with the increasing availability of contactless payments, especially via mobile phones.
By 2021, consumer spending is forecast to be roughly 45% higher, but the use of cash is expected to have fallen 1%, and cards may be in decline by then too. As consumers adopt new payment technologies, this may even prove a conservative forecast.
Adrian Kamellard, chief executive of the Payments Council, said: “The quiet revolution in payments has enabled the creation of whole new industries such as e-shopping, it has changed our behaviour, and it has reduced transaction costs, and increased the speed and efficiency with which we can all pay each other.
“The next ten years will see even faster change. It’s easy to imagine a future where we merely pat our pockets for our keys and phone. The wallet could become a historical curiosity.”