Pub visits fall as consumers grapple rising tax and falling incomes

31 August 2011 by
Pub visits fall as consumers grapple rising tax and falling incomes

Visits to pubs and bars have fallen by 19% year-on-year as consumers, particularly those in the 35-54 age bracket, grappled with falling disposable incomes, rising taxes and concerns over job security.

That's the finding of advisory firm Zolfo Cooper, which released its Leisure Wallet report today.

Over the last year the national average household income across a sample of 3,000 consumers fell by £494 to £30,730, a situation compounded by escalating fuel, food and energy costs. In total, 53% of those surveyed said their disposable income has decreased during this period while just 6% reported an increase.

The report found that visits to pubs and bars fell to 4.3 a month, (one visit less per month), with average spend per head down by £2.80 (19%) to £15.08.

The proportion of the population drinking in pubs was up slightly nationally but that was largely thanks to a 7% rise in the South East compared with a 12% drop in the North East.

Restaurants fared better, remaining the most popular leisure activity, but visits were down slightly compared with 2010, falling to 2.5 a month. Spend per visit was 40p up on last year, taking the average spend to £16.42. Although the 2.5% rise in average spend appeared to be good news on the surface, it mirrors January's 2.5% VAT increase.

In the struggling late night sector, visits were down by a third year-on-year, with spend per visit down 9% (£2.35) to £26.04. Zolfo Cooper said the sector could have finally hit rock bottom because the proportion of people clubbing (11%) has not declined in six months.

The firm also pointed to regional variations, with operators in the West Midlands and Wales having to contend with low average spend and fewer visits. while London showed 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.

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 consumers' 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."

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By Neil Gerrard

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