Leisure sector grows to £117 billion as UK consumers prefer pleasure to shopping

• New Deloitte report offers a snapshot of the UK leisure sector, which is worth £117 billion in revenue, accounts for 7.4% of GDP and has grown 5% annually since 2010;
• Survey of 3,000 consumers finds that 95% spent on leisure activities in Q1 2016;
• Leisure is attracting one and a half times more discretionary spend as retail, and the sector is growing twice as fast;
• Eating out is the most popular leisure activity with 85% of UK consumers spending on this in Q1 2016; in-home leisure has continued to grow to market worth £5.8bn

The UK leisure market is worth £117 billion in revenue and is growing nearly twice as fast as the retail sector, according to a new state-of-the-sector report and a survey of 3,000 UK consumers from Deloitte, the business advisory firm.

Passion for leisure: A view of the UK leisure consumer looks at the key drivers of the UK leisure market, including how consumer behaviour is changing and the impact that the sector has on the broader economy. The report has found that in recent years a more confident UK leisure consumer has emerged, which has led to leisure spending growing at a faster pace than total consumer expenditure. In the first quarter of 2016, 95% of consumers spent money on leisure activities.

While UK consumers are continuing to spend on traditional leisure activities such as holidays, theatre and bowling, they are increasingly spending more time and money on frequent, habitual activities such as gym memberships, music and video streaming and eating out.

Simon Oaten, partner for hospitality and leisure at Deloitte, comments: “In order to spend on leisure, consumers need sufficient disposable income to justify spending on non-essential activities. For this reason, the behaviour of the leisure consumer is essential to understanding the prospects for the UK economy.

“A confluence of factors, including low inflation and high employment levels, has boosted consumers’ spending on leisure in recent years. As a result, the UK leisure sector has grown at five per cent annually since 2010, outstripping GDP.

“Our analysis has found that we are witnessing an evolution in the mind-set of the leisure consumer; a behavioural shift from product-consumption to experience-consumption. Healthy high streets are those that have retail stores interspersed with leisure, such as cafés and restaurants that attract footfall. Experienced-based propositions are key in order to attract and retain customers.”

There’s no place like home
Eating out remains the most popular leisure activity in the UK, with 85% of consumers spending in this area in the first three months of the year.

In-home leisure, which saw growth from cash-strapped households during the recession, is the second most popular leisure activity in the UK. More than three quarters (77%) of consumers spent money on activities such as film, TV and music streaming and video gaming in Q1 2016. Significantly, the rise in household income in recent years has not led to a decline in spending on in-home leisure, indicating that this has now become a habitual leisure activity in the UK.

Oaten said: “Leisure is no longer defined as out-of-home activity. In-home leisure has continued to grow since the recession and consumers now regard these activities as part of their day-to-day leisure routine. Improved technology, such as smart TVs and streaming services have enabled consumers to enjoy leisure in the comfort of their own home, in addition to going out.

“Furthermore, the emergence of the collaborative economy has made consumers comfortable with the idea of paying for access to goods and services, rather than ownership. This has made their consumption ‘efficient’, as sharing assets such as cars and music provides them with more money to spend on what they want to enjoy.”

Brexit implications
The outlook for the leisure sector at the start of the second quarter of 2016 was positive, and consumers were bullish. However, the result of the EU referendum has led to uncertainty which may impact a leisure sector reliant on discretionary spending. In the longer term, the impact of leaving the EU will largely depend on the terms of the exit and their effect on consumers, employees and investors.

According to the report, should consumers experience a reduction in disposable income they will most likely reduce spending on frequent, habitual leisure activities such as betting and gaming (45%) eating out (39%) and drinking out (38%).

Oaten concludes: “The UK leisure sector has proven to be relatively robust in the face of recent economic shocks, supported by the growth of habitual leisure spend, as UK consumers have chosen to prioritise their spending in this area. Given the recent result of the referendum, it is now more important than ever that we understand and monitor the performance of the UK leisure sector, treating it as a barometer of consumer confidence.”

End

Notes to editors

About the research
The Passion for Leisure: A view on the UK leisure consumer report provides a view point on the key drivers of the UK leisure market, how consumer behaviour is changing and the impact the growth of the leisure sector is having on the broader economy. The report is largely based on two consumer surveys carried out by independent market research agency, YouGov, on our behalf. The surveys were conducted online with a nationally representative sample of more than 3,000 UK adults aged 18 and over. The research for Q4 2015 was carried out between 4 and 6 January 2016 and research for Q1 2016 took place between 18 and 20 March 2016. The report also uses a range of other data sources to describe broader trends in the leisure industry.

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

Member of Deloitte Touche Tohmatsu Limited.