Rising taxes, falling disposable incomes and concerns over job security are damaging trade in the leisure sector as consumers cut their spending and go out less often than they did a year ago, according to a report by leisure advisory firm Zolfo Cooper.
The Zolfo Cooper Leisure Wallet report surveyed 3,000 consumers and found that in the past year:
- Drinkers have cut back their visits to pubs and bars from 5.3 occasions a month to 4.3 a month, a decline of 19%.
- Customers’ average spend-per-visit is also down by 19% to £15.08, a £2.80 drop per customer per visit.
- Clubbers have restricted their number of nights out a month from an average of 2.6 to 1.9, a 35% decrease, and cut their in-club spend by 9% to £26.04, a £2.35 drop per customer per visit.
Restaurants fared slightly better. Diners have cut the number of visits they make to restaurants by 8% from 2.7 to 2.5 per month but eating out remains the most popular leisure activity enjoyed by more than two-thirds (68%) of the population.
Restaurant owners have seen spend-per-visit rise 40p to £16.42 – a 2.5% increase, although profits don’t rise accordingly due to January’s VAT rise.
Operators in the West Midlands and Wales have to contend with low average spend and fewer visits. London, on the other hand, is showing particular resilience, with more than half of drinkers going to the pub at least once a week and the highest average restaurant spend of any region.
“Operators in London are also helped by the capital attracting millions of tourists and the weak pound is a considerable advantage at the moment,” Zolfo Copper added.
Paul Hemming, a partner at Zolfo Cooper, said: “Last year the situation facing much of the leisure sector was very challenging so to see further year-on-year declines of 20% to 30% is definitely a concern. The pressure on consumer’s disposable income is forcing them to prioritise and they are choosing to cut back more on visits to drinks-led establishments than on dining experiences.
“The challenge for operators is to adapt and thrive in challenging market conditions. There are operators who are doing so but with consumers increasingly opting to stay in rather than go out, the importance of delivering value and customer service is paramount. Looking ahead, the results for restaurants provide some grounds for optimism but the same can’t be said about nightclubs, which continue to struggle.
“The situation varies across the country. We continue to see the resilience of London, which benefits most from tourism, and this supports the strategy of Youngs, Fullers and Greene King to grow their pub businesses in the capital. As always London will be prime territory for investors, particularly as the city is now less than a year away from the Olympics.”
