There has been a slight uplift in visits, with 90% of consumers visiting the On Premise in September. This marks a slight decline of -1pp compared to August, but illustrates strong levels of engagement compared to earlier months in the year.
While inflationary concerns continue to impact the sector, younger and more affluent consumers are driving a notable rise in frequency of visits and spending. 18–34-year-olds are leading this rise, with 45% going out more frequently, compared to a quarter (25%) going out less. Similarly, there is a 41% increase in outings among the 35-54 age group, despite a third (35%) still cutting back. Additionally, regular customers, who typically visit at least weekly, continue to bolster the market. Of these, 59% have increased their outings to capitalise on the last of the summer months.
Food and drink sales are echoing these visitation trends, as consumers who go out frequently are showing a willingness to spend. The latest CGA RSM Hospitality Business Tracker shows a modest but positive year-on-year growth, with food and drink sales growth in managed hospitality groups increasing by +1.3% in August compared to the same time last year.
However, this recovery is not without its challenges. While over a third (36%) of consumers predict their spending on eating and drinking out will increase in the coming month, nearly a fifth (19%) are still reducing their spend per visit due to ongoing cost-of-living pressures.
Consumers are increasingly opting for drinks categories that represent better value for money in their On Premise visits, and costs are influencing them to choose Softs (15%) or LADs (10%) and turn away from Spirits (7%), Wine (8%) and Cocktails (8%). While categories like beer often benefit due to the perception of offering more for the money, it’s important to note that consumers tend to associate value more with quality than just price. Spirits brands can still compete effectively by reinforcing their quality through smart promotions, offers, and an emphasis on premium serves and glassware. Understanding how to challenge these value perceptions is key, and demonstrate value, ensuring consumers stay loyal to the brand or category.
Despite the positive trajectory, a third of respondents (33%) are going out less frequently than a year ago, with general savings goals and concerns about inflation being the primary drivers.
Furthermore, 44% of those cutting back expressed cost of living concerns, with half (50%) pointing directly to increasing menu price as a major factor, although 4pp are less concerned versus last month, and 5pp are less concerned versus a year ago.
Overall, the contrast between those increasing their On Premise visits and those cutting back is becoming more defined. While younger, urban, and affluent consumers are helping drive growth; rural populations, older demographics, and those more severely impacted by inflation are holding back, creating a dual speed recovery for the hospitality industry.
Violetta Njunina, client solutions director said: “With the cost-of-living crisis continuing to impact consumers, suppliers and operators need to stay attuned to demographic variations. The increase in frequency and spending from younger, urban-centric visitors is encouraging. But this segment is only one part of the picture. This is why industry stakeholders need to offer value, consistency, and a strong reason to engage consumers across all demographics. So, it’s crucial to understand and flex with these nuanced behaviours to keep building momentum in the months ahead.”
CGA’s Cost of Living Pulse survey collects views from 950 nationally representative On Premise consumers in Britain and Ireland. The latest survey was conducted in late August and early September 2024.
While there are challenges, market-leading OPUS capabilities accordingly offer services to support and help suppliers and operators address these challenges, empowering them to track shifts in demand, preferences and priorities, and respond with winning strategies. To learn more, and subscribe to the reports, contact Hannah Payne here.
