Decline in leisure spending threatens restaurant industry

Alys Key
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Restaurants are facing a more cautious approach from consumers (Source: Getty)

Consumers in the UK reined in their spending on leisure activities in the third quarter of this year, as inflationary pressure squeezed wages.

Almost every category of leisure spending declined on the year in the three months to the end of September, according to a survey of 3,000 people by Deloitte.

The worst-hit sector was eating out, where spending dropped eight per cent. Drinking out in pubs, cafes and restaurants also fell five per cent. This aligns with trends noted by casual dining companies such as Franco Manca owner Fulham Shore, which said in September that customers were becoming more cautious.

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Simon Oaten, partner for hospitality and leisure at Deloitte, said: “The combination of rising inflation and lower wage growth is stretching disposable incomes and causing consumers to rethink their expenditure. It is no surprise that we are seeing UK consumers tightening their belts.”

Other declining sectors included culture and entertainment, which dropped six per cent, and holidays. Spending on short breaks fell three per cent.

The only leisure category to see no decline was live sport, which was flat year-on-year.

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This tied in with a trend for millennials to prioritise big-ticket items such as holidays and football matches, reducing spending more in other areas to fund these.

Meanwhile older consumers, especially those over 55, finally began to show signs of reducing discretionary spending after a period of resilience.

"The fact that older consumers are no longer able to protect their leisure spending is a sign of a tipping point," said Oaten.

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