Cost-of-living pressures are forcing renters and those with mortgages to slam the brakes on discretionary spending in restaurants, pubs and liquor stores.

The latest CBA Household Spending Insights (HSI) has revealed that in food and beverage spending declined by a sharp -3.8% in APril 2024, following on from a 2.1% increase in March. The volatility is due to the earlier than usual timing of the Easter holidays which were in March this year for the first time since 2016.

The largest contributors to the decrease were liquor stores, supermarkets, seafood stores, butchers and confectionary stores.

Spending on hospitality decreased by 3.3% in seasonally adjusted terms, following a 2.5% gain in March. As with food and beverage, the early Easter period would have had an impact on this volatility.

The reduced spending was most prominent in pubs, taverns, bars, cafes, restaurants, breweries and wineries, caterers and takeaway foods.

The CommBank Household Spending Insights (HSI) provides insights into how the Australian economy is performing based on consumer transaction data.

CBA Chief Economist Stephen Halmarick said the fall in April reflected an ongoing softening of household spending.

“The April HSI paints a picture of a constrained consumer following an early Easter bump in March. Significantly, the annual rate of household spending has fallen from 3.9 per cent in March to 2.6 per cent in April, led by a large drop off in discretionary spending, which is down 4.4 per cent in the month.

“Across the states, spending in Victoria continues to be subdued as NSW pulled away to sit with South Australia and Tasmania as the only states to post spending growth for the month. Western Australia declined 0.2 per cent in April to lose its mantle as the strongest spending state over the year.

“We expect weak consumer spending and below-trend economic growth to continue throughout 2024, and despite recent inflation data surprising to the upside, we anticipate the RBA will cut interest rates in November this year.”

However, people who own their own homes outright with no mortgage – typically older Australians – continue to spend strongly and at around five times the growth of renters.

The CommBank HSI index – which tracks month-on-month data at a macro level and is based on de-identified payments data from approximately 7 million CBA customers, comprising roughly 30 per cent of all Australian consumer transactions – also showed sharp differences among certain states and territories.