With a packed summer events calendar, including major sporting fixtures like the FIFA World Cup and music festivals, pubs are set to see a solid boost to trade in the coming months, OakNorth Bank’s fifth Sector Pulse report has shown.
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Community pubs, experiential leisure venues and food-led operators were highlighted as the biggest beneficiaries, most notably venues with outdoor trading space and strong local customer bases.
Moreover, with 77% of UK adults intending to take a domestic overnight trip over the next 12 months, operators are expected to benefit from sustained leisure demand despite ongoing economic uncertainty.
However, while inflation has eased and interest rates have fallen, consumers remain cautious with their discretionary spending.
Some 33% of consumers pointed to the cost-of-living-crisis as a barrier when it comes to discretionary spend and 49% were looking to cut back this year.
Value driven
While average spend per visit has increased, visit frequency has softened, creating a trading environment where operators must work harder to attract and retain customers.
According to the findings, demand is expected to be centred on value, experiences and social occasions, with shorter booking windows and increased use of promotions likely to persist across the sector.
On top of this, market consolidation has continued to create opportunities for well-capitalised operators to gain market share through acquisitions and expansion, OakNorth said.
The report added businesses with strong balance sheets, scalable concepts and efficient operating models were likely to be best positioned.
Following the loss of 305 licensed venues during Q1 2026 alone, consolidation was predicted to remain a defining feature of the sector throughout the remainder of the year.
Technology has also become increasingly important, with investment into automation, AI-powered forecasting, digital ordering, loyalty programmes and labour optimisation tools set to accelerate further over the next six months.
As well as increases to employer National Insurance Contributions and the National Living Wage over the last 12 months, payroll costs for hospitality have risen 30% since 2019, according to the report.
Highly competitive
Operators have also faced higher business rates alongside rising energy and food costs, reinforcing the need for operational efficiency and technology adoption to protect margins.
Commenting on the findings, OakNorth chief lending officer Ben Barbnel said: “The last six months have reinforced just how adaptable and resilient the UK hospitality and leisure sector has become.
“While operators continue to face significant cost pressures, many of the businesses we work with have demonstrated an impressive ability to innovate, improve efficiency, and evolve their customer propositions.”
He continued: “What continues to stand out is the strength of demand for businesses that deliver value, quality, and memorable experiences.
“Whether it’s experiential leisure concepts, innovative food hall operators, expanding restaurant groups, or premium accommodation providers, consumers are still willing to spend when the proposition is right.
“Looking ahead, we expect the market to remain highly competitive and operationally demanding. However, we also see significant opportunities emerging through consolidation, selective expansion, and continued investment in technology.”
