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Currently, 29% of German consumers report being severely impacted by the cost-of-living crisis, with an additional 30% moderately affected. Looking three months ahead, consumers expect the situation to intensify only slightly, with 30% anticipating severe impacts. This sentiment contrasts with near European neighbours, with Italy showing a less severe outlook (15%) and France anticipating a higher degree of impact (37%).
There’s a proportion of consumers expecting to visit the On Premise more frequently (17%) or the same amount (46%) in 2024 compared to last year, while some consumers expect to go out less (37%). Moreover, the majority of consumers (70%) expect to spend more or the same amount in bars and restaurants compared to last year, while 27% intend to spend less when visiting the channel.
In addition, the German government’s decision to reinstate the standard VAT rate on restaurants and cafes from 7% to 19% from 1st January 2024 adds another layer of caution. Post-tax increase, 49% of consumers anticipate visiting cafes and restaurants less frequently, signalling heightened price sensitivity among German consumers.
The data paints a complex picture for the German On Premise. The increased cost of living, coupled with higher VAT, is nudging consumers towards more cautious spending habits. Yet the desire for social experiences presents an opportunity for brands, suppliers, and venues to collaborate on promotions and events offering escapism while acknowledging cost consciousness.
Ultimately, the ability to remain agile, understand and respond to shifting consumer needs are key for emerging resilient and more connected to consumer bases.
Bilal Kaddouri, CGA by NIQ’s Client Solutions Director – Germany, said: “The cost-of-living crisis calls for a delicate balance between innovation and empathy. It’s essential for the On Premise to resonate deeply with consumers’ values and desires, rather than just offering a service. Delivering great value, unique experiences, and a sense of community – these elements are key to enticing consumers into venues to indulge and enjoy themselves, even with financial constraints. The Report helps brands and venues understand consumer challenges and how to respond to them now, while ensuring relevance and building advocacy for the future.”
You can download the full Germany On Premise Consumer Pulse Report for free here.
The On Premise Consumer Pulse Report provides a ‘temperature check’ of the channel and the consumers who visit bars and restaurants across all regions of Germany, looking into their On Premise behaviour over the past month and testing visit intention for the month ahead.
To learn more about CGA by NIQ’s unrivalled suite of services in Germany and how it can help your business, please email bilal.kaddouri@nielseniq.com.
