Consumers rein in leisure and eating out spending as pockets tighten

Spending in the UK leisure sector remained largely resilient in the first quarter of 2017 although there are signs that consumers may start to rein in leisure activities.

That is according to findings from the Leisure Consumer Q1 2017 report by business advisory firm Deloitte.

In the first three months of 2017, not only was there a quarterly decrease in net spending on eating out in restaurants (-3%), but coffee shops and pubs also experienced a reduction, decreasing by 3% and 2% respectively. However, net spending on gym use and playing sport increased 2% from Q4 2016, and long-haul holiday spending rose 4% and short-haul spending by 5% in Q1 from the previous quarter.

Simon Oaten, partner for hospitality and leisure at Deloitte, said: "The focus on health and wellbeing is as expected for the start of the year, with spending falling for eating out and rising for gym and sport-related leisure activities.

"The long-term change in consumer behaviour, whereby consumers have favoured spending on experiences over goods, was a key reason for the leisure sector's continued resilience throughout 2016.

"However, with inflation rising, a weak pound and a slowdown in nominal wage growth, leisure consumers are starting to feel their pockets tighten, leading to a fall in spending on some habitual activities and small luxuries, such as buying the daily coffee. While this has yet to result in an actual reduction of overall leisure spending, this trend will be monitored closely. The overall health of the sector will be an important economic indicator in the months to come."

According to the research, consumers aged 18-34 years old are also seemingly cutting back their spending on certain leisure activities to protect their disposable income for going out. Compared to Q1 2016, spending intentions over the next three months have fallen for in-home leisure (-8%) and going to the gym (-7%). At the same time, millennial consumers reported a 7% year-on-year rise in expected spending on pubs and bars, and a 4% rise in net spending eating out in restaurants.

Oaten added: "The habitual and prioritised nature of leisure spending continues to prevail, and for younger consumers, that means going out and socialising over some food and drinks. Millennials are favouring experience-led leisure activities and in doing so are challenging the perception that young people stay at home glued to their screens."

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