Retailers are being warned to prepare for consumers to spend less in 2016, as they plan to splash out on nights out and home improvement, according to a new report.
The KPMG/Ipsos think tank has forecast the growth of retail sales to fall slightly to 1.7% in 2016, down from 1.8% in this year, despite consumers having more money to spend.
But with Barclaycard reporting an 11.4% rise for hotels, pubs and restaurants in 2015, KPMG and Ipsos expect that growth to continue into 2016 as more consumers use their extra cash for nights out.
Retail analysts Maureen Hinton, who sat on the report panel, said: “Consumers are looking beyond retail for goods and services to spend their money on.
"This is making it much harder for an oversubscribed retail sector. Leisure, culture, entertainment have shown much stronger growth than retail over the past five years and this trend is being exacerbated by an ageing population.”
Some of the extra cash will also go towards things like paying off the mortgage and tradesmen for home improvement, the think tank said.