Tough Trading Ahead for Hospitality as Consumers Cut Back on Going Out
New research from PwC UK has revealed growing pressure on discretionary spending, with almost three in 10 consumers planning to go out less, adding to concerns for Britain’s hospitality and leisure sector heading into the second half of the year.
According to the latest PwC Consumer Sentiment Survey, 85% of consumers remain concerned about the rising cost of living, despite inflation easing from the highs seen during the peak of the cost-of-living crisis. The survey found that 28% of consumers intend to reduce visits to hospitality and leisure venues, while many are also trading down to cheaper products and lower-cost retailers.
PwC said the findings point to a consumer base that may have the financial capacity to spend but lacks the confidence to do so. The report noted that UK households are saving more than before the pandemic, with sentiment rather than disposable income increasingly dictating spending behaviour.
The research found net consumer confidence remained at -5 during the latest survey period, with younger adults and more affluent households showing signs of increased caution amid concerns around job security, taxation and the wider economic outlook.
For operators across pubs, bars, restaurants and wider leisure, the data reinforces ongoing concerns around subdued discretionary spending and increasing value sensitivity among consumers. PwC warned that “trading down” behaviour seen during the height of the cost-of-living crisis is beginning to re-emerge.
The professional services firm suggested hospitality businesses may need to place greater emphasis on value-led propositions, premium-at-home alternatives and experiences that consumers view as “worth it” in order to maintain spend levels.
The findings align with wider industry research showing continued caution in leisure expenditure. Separate analysis from Deloitte UK
reported that spending intentions on eating out and drinking in pubs and bars fell sharply entering 2026, reflecting what it described as an increasingly “price-conscious and planning-focused consumer.”
PwC’s report also highlighted that Christmas and “Golden Quarter” spending could still outperform expectations if consumer confidence improves, noting that shoppers historically tend to spend more than they initially forecast. However, the firm cautioned that operators will need to work harder to unlock discretionary spending.
Sam Waller, leader of industry for consumer markets at PwC UK, said the key challenge for businesses is rebuilding consumer confidence rather than simply responding to lower incomes.