Consumers cut back on leisure spend at start of year

UK consumers are spending less on leisure in order to prioritise the essentials and this cautious approach shows no signs of diminishing, according to new data.

The Leisure Consumer Q1 2018 report by Deloitte found that consumers have reduced their leisure spending in seven of the 11 categories compared to the same period last year.

The quarterly survey of 3,000 adults revealed a four percentage point decrease in culture and entertainment spending, while drinking in pubs/bars and in-home leisure both saw spending fall by three percentage points.

When asked about their spending intentions for the next three months, consumers said they are planning to reduce spending on all habitual leisure activities, including going out to restaurants (down five percentage points) and drinking in coffee shops (down one percentage point).

The prolonged cold winter sparked an increase in spend on holidays, with spending on long-stay breaks increasing by three percentage points, while short-stay spending rose by two percentage points year-on-year.

But planned spending in Q2 on long-stay and short-break holidays is significantly lower compared to the level seen last year, falling by 10 and eight percentage points respectively.

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.

"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."

Attending live sporting events and playing sport/going to the gym are the only leisure categories that can expect to see a rise in spending over the next three months, both rising by one percentage point. UK consumers are expecting to spend more on these categories as the weather improves during the spring months.

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.

Consumer confidence growing but hospitality yet to feel the benefits >>

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

“Self-imposed austerity” causes biggest fall in spending on eating out in a year >>

Get The Caterer every week on your smartphone, tablet, or even in good old-fashioned hard copy (or all three!).