Spend at UK bars, pubs and clubs drops 0.4%

Consumer spending at bars, pubs and nightclubs in the UK fell by 0.4% in July, according Barclays’ snapshot of card activity.

Spend in the overall hospitality and leisure sector actually rose by 2.7% in July – an uplift from the previous month’s 2.1% – Barclays’ latest Consumer Spend Report revealed.

But growth was stagnant in the overall eating and drinking category, with spend only climbing by 0.8%, according to the data which analysed UK spending patterns from 28 June to 25 July.

Pubs, bars and nightclubs hardest hit with spending falling by 0.8%, as consumers grappled with inflation, as the average pint prince soared to approximately  £5.17 just one month before.

Additionally, more than half (51%) of consumers surveyed said they are planning to cut down on discretionary spending, with 54% planning to cut back on restaurant dining, and 42% on bars, pubs and clubs.

July saw a slew of high profile closures in the hospitality sector, which is battling high tax burdens, utility bills and staffing costs. Among these was BrewDog, which announced it would shut 10 bars, with pub operator Oakman Inns and cocktail chain Simmons also entering administration.

Grocery sees spending uptick

Meanwhile, in the grocery category, spending shifted up by 0.9%, boosted by spending at specialist food and drink retailers, which grew by 3.1%, as consumers likely made the most of July’s sunshine with picnic and BBQs.

This comes after recent data from IWSR found alcohol spending was falling across key global markets due to ongoing cost-of-living concerns. 

“Consumer sentiment [is] neutral to negative, and spend even more subdued,” said Richard Halstead, COO Consumer Insights at IWSR. “The US and China are seeing some of the biggest falls, and sentiment has weakened across Asia-Pacific, with other markets maintaining the same levels as a year ago.”

But there were silver linings. While older drinkers pull back, Gen Z is pushing forward. The Bevtrac data shows alcohol participation among LDA+ Gen Z adults has climbed to 73%, up from 66% in April 2023. The rebound is most pronounced in Australia, where participation jumped from 61% to 83%, and the US, up from 46% to 70%.

Opting for premium

“The propensity to go out and spend more is recovering among this group – challenging the received wisdom that this generation is ‘abandoning’ alcohol,” said Halstead.

And while Brits are going out less frequently, when they do, they are in search of higher quality beverages, according to research from Fentimans and CGA. Some 29% of consumers claimed they would pay more for a ‘better’ quality drink, the report revealed.

This sentient was echoed earlier this year, at Wine Paris, with WSTA CEO Miles Beale also claiming “people are drinking less, but they’re drinking better”.

His advice? Keep it simple:  “I love wandering around Wine Paris, but there are so many products where people talk in great detail about the winemaking process, the vineyard, the terroir. If you want younger consumers to drink as much wine and spirits in the future as past generations, you need to make it much easier for them.”

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