Today, more prudent British consumers question their spending priorities and existing brand relationships. This opens up opportunities for agile and innovative companies and brands eager to capitalise on the new mood. Operators of cinemas and theatres, music venues and sports stadia could do well, as consumers look for affordable pleasures to replace the holidays and short breaks abroad they’re cutting back on.
Many sectors within the leisure and entertainment market have seen little or no growth during the period of recession and economic weakness over the past five years.
On a positive note, though, the state of the UK economy has deterred people from taking foreign holidays, which has boosted the domestic holidays sector and, with it, the days out attraction industry. The weakness of the pound has served to make the UK an attractive destination for overseas holidaymakers, however, and the UK’s downgrade and the woes of the eurozone mean that this will continue.
Growth in the ownership of technology products has helped boost the customer experience in many markets and introduced new users to sectors such as gambling. This will continue as more consumers acquire tablets and smartphones.
High youth unemployment has had an impact on leisure sectors such as nightclubs and, to a lesser degree, tenpin bowling, which derive a large part of their customer base from the younger, less affluent consumers who have been so impacted by austerity measures. With unemployment set to stay at a high level for several more years, little respite is expected for operators in these markets.
According to Mintel’s recently published British Lifestyles report, the largest proportion of consumers indicate their spending on entertainment is unchanged when compared with a year ago, although more consumers are spending less than a year ago (39 per cent) when compared with those who are spending more (7 per cent). Those claiming to spend more are heavily weighted towards 16-24-year-olds, singles and students, underlining the fact that going to university or college often results in increased social activity (and spending).
Overall, the winners in the leisure industry during 2013 are likely to be those providing activities which offer a relatively affordable opportunity for consumers to escape from the daily grind of scrimping, such as the cinema, performing arts, music concerts, and spectator sports. Many of these activities are treats which people have rewarded themselves with in order to compensate for cutbacks in other areas, such as short breaks abroad.
The losers are likely to continue to be those sectors which are being impacted by longer-term demographic and lifestyle trends as well as the shorter-term impact of economic recession, such as nightclubs and bowling.
Health and fitness clubs and leisure centres and swimming pools seem certain to come under further pressure as a result of competition from a growing range of online tools and apps which allow consumers to monitor, measure, compare and share their fitness levels. The sports equipment market, meanwhile, looks set to feel the heat from a continuation of the trend back towards less expensive outdoor sports such as running.
