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Hot summer boosts spending across the sector

23 July 2018 by
Hot summer boosts spending across the sector

The hot summer has boosted spending across eating out, drinking in pubs and bars and spending in coffee shops.

Spending on leisure activities in the second quarter of 2018 increased on both a year-on-year and quarterly basis, according to the latest findings from Deloitte's Leisure Consumer Q2 2018 report.

Driven by record levels of consumer confidence, the quarterly survey of 3,166 UK adults revealed a three-percentage point growth in leisure spending compared with the same period in 2017, and a two-percentage point rise from the previous quarter.

Consumers reported increasing their leisure spending in nine out of 11 categories compared to the same period in 2017, with spending on eating out rising by five percentage points in the last year.

Drinking in pubs/bars saw a year-on-year increase of four percentage points. Similarly, spending in coffee shops/sandwich shops has seen a three-percentage point gain compared to Q2 2017.

The quarterly jump in spending was also partly in reaction to the prolonged cold winter weather in spring, boosted by the feel-good factor from major events such as the royal wedding.

Simon Oaten, partner for hospitality and leisure at Deloitte, said: "If consumers are spending on discretionary leisure items, whether that be cappuccinos or holidays, then that is a clear sign confidence in personal disposable income. It has been a challenging first half of the year for the sector, with a number of businesses, particularly in the casual dining sector, having to make bold strategic decisions. Nevertheless, the fact that leisure consumers are in good spirits is welcome news.

"Crucially, more habitual categories such as eating out and drinking in pubs and bars have seen a spending boost, a further sign of easing income pressure and improving consumer confidence."

The research also showed that over the next three months, UK consumers said they expect to increase their spending in 10 out of 11 categories compared to the previous year.

Oaten added: "The positive leisure consumer outlook is in contrast with news about the struggling high street and political uncertainty. However, leisure businesses should feel optimistic about the growing confidence and the spending intensions of the leisure consumers, and will need to ensure they make the most of this feel-good factor.

"Significantly, our research has revealed that consumers are looking to spend across a broad range of leisure categories. This means that businesses from across the leisure sector should be able to benefit from the current mood, whether you're a holiday operator, café, hotel, theatre or sports venue. In order to capitalise on this more confident market, leisure businesses need to ensure they continue to meet the needs for experience-seeking consumers."

Consumer confidence at highest level since tracker began >>

Pubs and restaurants see growth in consumer spending in January >>

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