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Britons are choosing to spend less money in pubs and bars than at any time since lockdown ended, according to research by Deloitte, as cost of living pressures weigh on people’s leisure habits.
The survey, which asked nearly 3,200 UK consumers if they had spent more, less or the same on leisure in the past three months, showed sentiment in “eating out” and “drinking in pubs and bars” had declined by about 6 percentage points from the previous quarter.
While an appetite for dining out dipped to levels seen at the end of 2022, pubs and bars recorded the lowest interest since reopening after the Covid-19 pandemic.
“The cost of living crisis and the fact that things remain more expensive than they were a year or two years ago are impacting [consumer behaviours],” said Céline Fenech, consumer insight lead at Deloitte.
The findings come as consumers are broadly feeling more optimistic about spending overall. Deloitte research published earlier this month found that confidence reached a two-year high in the first quarter of 2024, supported by falling inflation and real pay growth.
“We are seeing signs of consumers easing their discretionary spending restrictions, but we are not seeing a splurge yet in leisure spending,” said Fenech, adding that the drop was partly due to the effects of big-spending events such as Christmas which had dented budgets.
“There is no doubt that people are still trading off between spending on food at home and on going out,” she added.
Tim Martin, founder of the JD Wetherspoon chain, said competition from supermarkets was “a big challenge for pubs”, with the disparity in prices between the two widening in recent decades. This was “causing people to drink more at home”, he said.
David McDowall, chief executive of the UK’s largest pub operator Stonegate which owns the Slug and Lettuce brand, said sales had come back to pre-pandemic levels, with a boost at Christmas when the company traded ahead of expectations. But January had been worse than expected.
“People for a week or two after a big occasion tend to be more careful with what they spend,” McDowall said. “That’s a little bit more pronounced than it would have been years gone by.”
Pub operators said they were grappling with the costs of food and drink, energy and most recently wages, an issue triggered by an increase in the national living and minimum wage.
“The cost inflation in our sector is taking longer to feed through . . . It lags perhaps compared to retail and more generally,” said Andrew Tighe, director of policy and strategy at the British Beer and Pub Association, the industry body.
Tighe added that months of wet weather had also dealt a blow to pubs. With inflation easing and the prospect of interest rate cuts on the horizon, summer would be “really important for the trade”, he said.
Survey respondents were canvassed in mid March across 11 different leisure categories, with the results to be released by Deloitte this week.
Sentiment for other activities, such as “attending live sports events”, “holidays, hotel stays and leisure travel” and “culture and entertainment” also dropped from the previous quarter but at a more modest rate.
Betting and gaming was the only leisure category to register an increase in interest.