Hospitality sees signs of recovery amid continued cost of living pressures

The hospitality industry has seen tentative signs of recovery but ongoing pressures on household finances continue to shape channel engagement, consumer footfall, and brand spend, according to data from CGA.

Notably, more than half (55%) of UK households say they are either severely or moderately impacted by the cost of living. As a result, this adverse impact is stirring up subdivisions in behaviour.

High costs and less disposable income remain the biggest hurdle for the 42% of consumers who are going out less than usual.

In contrast, one in five consumers are going out more. Social motivations, like friends and family going out more and treats are key factors driving increased visitation frequency.

In terms of spend, fewer consumers have decreased their overall monthly spend compared to last year. But those watching their spend per visit are doing so to budget, indicating ongoing caution with disposable income.

Everyday essentials like groceries remain the bigger priority for many, with 40% of UK consumers actively trying to save on their food shop. Eating and drinking out are perceived as more of a luxury or indulgence for some.

Cocktails lead the way in drink experimentation and an added incentive when a third (34%) of consumers are trialling a new drink this month. Beer follows closely behind, while other categories lag.

Karl Chessell, CGA by NIQ’s director of hospitality Operators and Food, EMEA, said: “It’s a pivotal moment for the British On Premise. Many consumers understandably remain cautious. But there’s a growing appetite among important segments to go out, spend more, and try something new – if the offer is right.

“As we head into summer, operators and suppliers who focus on delivering value, relevance, and quality across the most effective touchpoints are best placed to sustain and grow that spend by aligning with changing consumer priorities.”