The hospitality industry is better equipped to deal with an expected to bare the brunt of the economic downturn than it was 15 years ago, according to a report by PricewaterhouseCoopers
Although 27 per cent of consumers said that restaurant meals, take-aways and trips to the pub would be the first luxury to be cut, David Trunkfield, director of PricewaterhouseCoopers, predicted that although footfall will drop, spend per head should be less affected.
The report said that since the recession in the early 1990s,when one in five people ate out regularly, this figure has trebled in 2008. The boom period saw consumer spending shift and eating out became a necessity rather than a luxury due to the high employment rate of both women and men.
"There is a wider range of restaurants this time around and a much wider choice of casual dining options for consumers," explains Truckfield. "Eating out used to be a more formal, three course meal but is now a habit for many consumers enjoying affordable choice. The credit crunch will not change the course of this cultural behaviour," he added.
Out of the 46 per cent surveyed that said they would eat out less, 13 per cent would spend less at the same restaurants and 11 per cent will eat out in cheaper restaurants.
"Lower socio-demographic groups are more likely to stop eating out altogether and families with higher mortgage repayments will also be reluctant to eat out," added Truckfield. "The good news is that under 25s, who are not tied to a mortgage, are still spending and enjoying the hospitality scene."
The report identifies that people are already getting nervous about the economic climate, with nearly 60 per cent of consumers this summer thinking their household will be worse off in the next 12 months – compared to 37 per cent in April.
Trunkfield said: "The challenge for restaurants is to try and keep the same customers through promotions, discounts and good set menus, but more importantly through excellent customer service. Customers need to walk away with more than a full stomach – they will be looking for a good experience that provides value for money."
