The findings of the report indicate that most consumers (87%) are already affected by the cost-of-living crisis. The results show that it’s unfortunately the youngest, and the oldest that are most affected, as 91% of both Gen-Z (18-25) consumers and respondents aged 66+ have felt the impact of the crisis; the least affected (78%) were in the 56-65 age group. There is no substantial difference in response from a gender perspective.
Furthermore, the results of the study also show that if budgets contracted, 3 out of 4 (72%) would reduce visit frequency to their favourite hospitality venues, rather than find a cheaper alternative. Sector analysis revealed that the highest percentage of consumers opting for the reduction of frequency, rather than cost, were identified in the quick service sector (79%), meaning that people are least likely to choose a cheaper alternative to the place they usually get their lunch / coffee from - they would rather just go less often. One can assume that this statistic would be a good indicator for brand loyalty - suggesting that brand loyalty is highest within quick service, over other sectors. Quick service was followed by dining out (76%), drinking out (70%), leisure (69%) and lastly accommodation (65%). From a demographic perspective, Gen-Z stands out as the age-group who could most likely be swayed by cost, the report reveals.
Consumers were also asked to pinpoint what they’d stop spending on first, if budgets tightened. The ranking from lowest priority to top priority for spending is as follows: 1) delivery & takeaway, 2) holidays abroad, 3) eating / drinking out, 4) retail (non-essentials) 5) UK holidays. The results suggest that delivery & takeaway market may soon see a decline after a long period of success and stability, whereas UK domestic holiday sector, which saw a boom last year, appears to be in a strong position again.
Full report: https://www.hgem.com/opinion/cost-of-living-crisis