Fall in consumer spends in pubs and bars, research shows

02-May-2018 - Last updated on 02-May-2018 at 09:34 GMT

Discretionary spending: consumers have reduced leisure spend to prioritise essentials

Consumers reduced their spending in pubs and bars by three percentage points (pp) and eating out by 2pp year on year in the first quarter of 2018, amid a wider cutback in leisure spending, research from Deloitte reveals.

According to the report, UK consumers adjusted their discretionary spending to prioritise essentials, with a reduction in leisure spending in seven out of 11 categories compared to the same period in 2017.

Of those who spent less on going out in the first three months of 2018, 45% said they did so because they could not afford it, suggesting that consumers were consciously downshifting their discretionary spending.

Impact of a cold winter

The prolonged cold winter and impact of the Beast from the East prompted consumers to boost their spending on holidays, with spending on long stay increasing by 3pp, while short-break spending rose by 2pp year on year.

When asked about their spending intentions for the next three months, consumers said they were planning to spend less money in almost every category, including eating at restaurants and drinking in pubs and bars – both down 5pp.

Simon Oaten, partner for hospitality and leisure at Deloitte, said: “Consumers are still feeling the pinch and, as a result, they are consciously re-evaluating the way they spend on leisure activities.

“This is one reason why we have seen such a decline in spending on in-home leisure. Cutting back on takeaways and entertainment purchases is easier for consumers to influence and, therefore, this category is more volatile to changing levels of income.

'Useful barometer'

“Leisure expenditure is a useful barometer to gauge consumers’ ability to spend their disposable income. For the first time since Q1 2016, overall confidence is growing while leisure spending is declining. It remains to be seen whether this divergence will continue, but it is a clear sign of the income pressures facing consumers and how they are being mindful when delving into their pockets.”

Oaten added: “Consumers are sheltering their disposable income in order to prioritise spending on essentials. Leisure businesses will be hoping that improved weather conditions may encourage consumers to go out and spend in restaurants, bars and pubs after a long winter period.

“It appears unlikely that the ‘good times’ will return to consumers in the next three months, with spending intentions well below where they were a year ago. That being said, the World Cup – an event that typically gives a boost to leisure spending – could come at just the right time to encourage consumers to delve into their pockets to spend on leisure activities.”