The ‘Cost-of-living-crisis’ consumer sentiment report surveyed 450 members of HGEM’s mystery guest database between the ages of 16 to 66+, and revealed most consumers (87%) to already be affect by the cost-of-living crisis.
Findings showed the youngest and oldest were most affected, as 91% of both Gen-Z (18 to 25) consumers and respondents aged 66+ had felt the impact of the crisis. The least affected (78%) were the 56 to 65 age group, and there was no substantial difference in response from a gender perspective.
Furthermore, the study results revealed if budgets contracted, three out of four (72%) would reduce visit frequency to their favourite hospitality venues, rather than find a cheaper alternative.
Sector analysis also unveiled the highest percentage of consumers opting for the reduction of frequency, rather than cost, were identified in the quick service sector (79%), meaning people were less likely to choose a cheaper alternative to the place they usually got their lunch or coffee from – they would rather just go less often.
This statistic could be an indicator of brand loyalty – suggesting brand loyalty is highest within quick service, more than other sectors, said HGEM.
Quick service was followed by dining out (76%), drinking out (70%), leisure (69%) and accommodation (65%). Gen-Z were the age-group who could most likely be swayed by cost, the report revealed.
Consumers were also asked to pinpoint what they’d stop spending on first if budgets tightened. The ranking from lowest priority to top priority for spending was as follows:
- Delivery & takeaway
- Holidays abroad
- Eating and drinking out
- Retail (non-essentials)
- UK holidays
The results suggested the delivery & takeaway market could soon see a decline after a long period of stability and success, whereas the UK domestic holiday sector, which saw a boom last years, appears to be in a strong position again.