According to data from RSM UK, consumers are actively planning to increase spending on leisure, eating out and attractions in response to lower prices this summer.
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Last month, Chancellor Rachel Reeves announced a temporary 5% VAT cut on children’s meals in pubs and restaurants this summer as part of a wider scheme to ease the cost-of-living squeeze for consumers.
RSM’s Consumer Outlook survey of 2,000 consumers found four in 10 families planned to go out more this summer (41%) as a direct result of the initiative.
More affordable
The report added the move had encouraged families across income brackets to up discretionary spending over the coming moves.
Some 44% of households with an income between £20k to £40k planned on more family days out, nearly a third (29%) with an income between £40k to £80k and over half (52%) of families with a household income of more than £80k.
Commenting on the findings, RSM UK head of leisure and hospitality Saxon Moseley said: “With many households continuing to watch their spending, a VAT cut on family days out could provide a timely boost to hospitality businesses this summer by making leisure activities more affordable.”
Though Moseley warned the success of the policy was dependent on how much of the saving could “realistically” be passed on to consumers.
Administrative burden
“Restaurants face an uphill task to update systems and re-print menus within a tight timeframe and given it only covers the summer period, some may feel the administrative burden outweighs the benefits.
“However, leisure operators such as theme parks and cinemas are better placed to update ticket pricing at short notice.
“Our data indicates that for businesses that embrace the changes they could reap the benefits with families looking for value this summer,” Moseley continued.
“In addition, with the industry calling for the Government to go further and permanently cut VAT on hospitality, the temporary measure this summer could be a good trial to demonstrate the wider impact reforms could have.”
