In a crowded marketplace where there are so many ways to spend your hard earned money – or Uni loan, come to that – who is winning the battle to get you to part with your cash?
Over the last few years, consumers have been really very nice to themselves, spending money on a daily basis on products that used to be seen as luxuries – in particular, take-away coffee and eating out. Where once it was a treat to have a coffee, now 80% of people who visit coffee shops do so at least once a week, whilst 16% visit on a daily basis. [Source: British Coffee Association]. If you take the average cost of a medium sized coffee, a daily latte equates to £13.00 a week. No wonder there have been coffee shops opening at a rate of knots.
But, it seems that all good things have to come to an end. Looking at third quarter figures for 2018, spending on habitual leisure activities – drinking coffee and eating out – has fallen 2%. Research has shown that consumers are spending their money on experience based activities, such as cinema, gyms, paintballing, bowling and escape rooms. Much of this is being driven by millennial spending power, where shared experiences are taking precedence over quick gratification, with a 7% increase in spending from that particular group on experience-based activities.
In the wider market, consumers in the older age groups are buying fewer coffees, sandwiches and casual meals out and saving their money for holidays and bigger entertainment tickets, where there has been a rise in spending. There is more emphasis on sharing experiences with family and friends and people are being more careful about spending on unnecessary daily extravagances – although some die-hards will still claim that their daily dose of caffeine is definitely an essential!
Of course all of this has contributed to the struggles of the casual dining market, where net spending is expected to fall a further 4 percentage points at a time when the sector really needs a boost. With Christmas usually a period where restaurants can expect to see a rise, consumer research is indicating that people are more aware than ever of the need to prioritise where they spend their disposable income and are planning on using their money for more experience and family based activities rather than for habitual spending – meaning that there may be further trouble ahead for restaurants in an already difficult and turbulent trading market.
There are a lot of ad campaigns using the “for the price of just two coffees a week….” tack. Couple this with the drive for a lower waste society and it seems that people are taking note and the trend for more sustainable, thrifty habits is well and truly on its way in.