Leisure spending falters as UK consumers feel pinch
30 April 2018
- Deloitte’s Leisure Consumer Q1 2018 report reveals cautious leisure spending;
- Spending sees year-on-year falls across majority of leisure categories in Q1 2018;
- Leisure spending unlikely to improve in Q2, although improving weather and World Cup could spark leisure consumers into life.
UK consumers spent less on leisure activities in Q1 2018 and adjusted their discretionary spending in order to prioritise essentials, according to the latest findings from the Leisure Consumer Q1 2018 report by Deloitte.
Despite improving consumer confidence in the first quarter of 2018, the quarterly survey of more than 3,000 UK adults revealed the extent to which leisure spending is under pressure.
Consumers reported reducing their leisure spending in seven out of 11 categories compared to the same period in 2017. Culture and entertainment spending fell by four percentage points year-on-year, while drinking in pubs/bars and in-home leisure both saw spending fall by three percentage points. Of those who spent less on going out in Q1 2018, almost half (45 per cent) said they did so because they could not afford it, suggesting that consumers were consciously downshifting their discretionary spending.
The prolonged cold winter and impact of the ‘Beast from the East’ prompted consumers to boost their spending on holidays, with spending on long stay increasing by three percentage points, while short break spending rose by two percentage points year-on-year.
The quarterly view showed a similar picture, with seven categories also seeing a reduction in leisure spending compared to Q4 2017. In line with seasonal expectations and post-Christmas belt-tightening, in-home leisure expenditure fell by eight percentage points from the previous quarter.
Simon Oaten, partner for hospitality and leisure at Deloitte, comments: “Consumers are still feeling the pinch and, as a result, they are consciously re-evaluating the way they spend on leisure activities.
“This is one reason why we have seen such a decline in spending on in-home leisure. Cutting back on takeaways and entertainment purchases is easier for consumers to influence and therefore this category is more volatile to changing levels of income.
“Leisure expenditure is a useful barometer to gauge consumers’ ability to spend their disposable income. For the first time since Q1 2016, overall confidence is growing while leisure spending is declining. It remains to be seen whether this divergence will continue, but it is a clear sign of the income pressures facing consumers and how they are being mindful when delving into their pockets.”
Q2 leisure spending unlikely to spring into action
When asked about their spending intentions for the next three months, consumers said they were planning to spend less money in almost every leisure category, with the cautious approach to discretionary spending showing little sign of abating.
In particular, net spending on long stay and short break holidays is significantly lower compared to the level seen last year, falling by 10 and eight percentage points respectively. Consumers are also planning to reduce spending on all habitual leisure activities, including going out to restaurants (down five percentage points) and drinking in coffee shops (down one percentage point).
Attending live sporting events and playing sport/going to the gym are the only leisure categories that can expect to see a rise in spending over the next three months, both rising by one percentage point. UK consumers are expecting to spend more on these categories as the weather improves during the spring months.
Oaten adds: “Consumers are sheltering their disposable income in order to prioritise spending on essentials. Leisure businesses will be hoping that improved weather conditions may encourage consumers to go out and spend in restaurants, bars and pubs after a long winter period.
“It appears unlikely that the ‘good times’ will return to consumers in the next three months, with spending intentions well below where they were a year ago. That being said, the World Cup – an event that typically gives a boost to leisure spending - could come at just the right time to encourage consumers to delve into their pockets to spend on leisure activities.”
Notes to editors
About the research
Deloitte’s Leisure Consumer Q1 2018 research aims to provide 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. Spending figures are based on a consumer survey carried out by independent market research agency, YouGov, on Deloitte’s behalf. This survey was conducted online with a nationally representative sample of over 3,000 UK adults aged 18+ between 23 and 26 March 2018.
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