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Are millennials to thank for increasing trade in the leisure sector?

On 03/04/17

Simon Mydlowski, leisure and hospitality partner at Gordons, examines whether millennials are to thank for the growth in dining and drinking out.

The UK’s pub, bar and restaurant scene has constantly evolved over the years to meet changing tastes, behaviour and buying patterns.

One of the key challenges for many venues has been deciding whether to cater for all demographics or to focus on attracting key age groups with a distinct offering, and recent figures from Deloitte could influence this approach.

Data compiled by the business advisory firm shows that leisure sector spending in the fourth quarter of 2016, which includes food and drink purchases in bars, cafes, pubs and restaurants, was driven by the 18 to 34-year-old age group.

This demographic – now commonly referred to as ‘millennials’ - is playing a major role in driving growth in the leisure trade, and it is clear to see how this is occurring when looking at the evolution of the leisure sector in recent years.

Evolving tastes and offerings

There has been a clear rise in the number of boutique, artisan and alternative venues across the UK over the past few years, with café culture now firmly ingrained in Britain, and the exponential growth of craft beer destinations with unique food and drink offerings turning the tide of staying in.

The fall-out from the economic downturn was a major factor in people’s reticence to dine and drink out, but the recovering economy has had a catalytic effect on the leisure market, with the chief factor being that people simply have more disposable income.

According to Deloitte’s index, confidence among millennials is at a six-year high, which is a stark contrast with older consumers; spending on eating and drinking out has fallen by one percentage point for those aged between 35 to 54 and by two percentage points for those aged 55 or over.

Future outlook

Most indicators point towards the leisure sector continuing to embrace the trend for millennial-focused venues, with proprietors realising that this demographic is not only more likely to spend their disposable income at their venues, but also evolve into long-term customers.

Other considerations will include the potential impact of the hard Brexit and how the fall-out will affect both the pockets and spending habits of consumers, as well as the effect on supply chains and the food and drinks products served.

While many pubs, bars and restaurants will continue to aim for diversity in their offerings to ensure that all demographics and tastes are catered for, those that pay particular attention to the desires of the millennial generation may be the ones in the best position to benefit.

To contact Simon please call 01274 202514, email or visit the Gordons LLP website.


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