Consumers still hesitant to return to bars and restaurants - report

There is significant pent-up consumer demand for hospitality and leisure - but the majority of UK consumers are still hesitant to return to restaurants and bars as they emerge from lockdown.

That 's according to the latest EY Future Consumer Index.

The survey of more than 1,000 UK consumers found 37 per cent are planning on spending more on out-of-home recreational services versus 26 per cent in October 2020.

Meanwhile, 43 per cent plan on spending more on a holiday post-Covid-19, up from 31 per cent in October.

However, almost two-thirds of those surveyed (65 per cent) feel uncomfortable going to a bar or pub, up from 52 per cent in October, while 57 per cent feel uncomfortable with eating in a restaurant, up from 37 per cent in October.

Over half (55 per cent) believe the virus will only stop affecting their daily lives after most of the population is vaccinated.

This suggests that the big 'unlock ' in consumer behaviour may come later in the summer once most of the vaccination programme is due to be completed, rather than from 12 April when restrictions on outdoors hospitality are expected to be lifted, or from 17 May for indoors hospitality.

Consumers ' ability to spend will be supported by recently elevated savings ratios.

Christian Mole (pictured), EY UK&I head of hospitality and leisure, said: “Pent-up consumer demand will likely lead to an initial increase in activity, but many hospitality and leisure operators may need to prepare for a potential drop-off and then a slower build through the summer.

“We expect to see particularly strong trade for businesses serving domestic travel demand, given the significant consumer appetite for holidays while restrictions on foreign travel remain. Market-wide hotel occupancy data from 2020 showed a significantly above average performance in the summer and early autumn by cities with strong domestic travel demand, such as Inverness, Plymouth and York.

“Conversely, city centres will continue to be affected by the lack of both overseas tourism and business-related hospitality and travel activity.

“The extent and rate of recovery in these areas is uncertain, and we expect comparatively reduced occupancies to continue for hoteliers and lower footfall in pubs and restaurants for at least the medium term, as commuter volumes remain below pre-pandemic levels. ”

The Index found that 24 per cent of respondents expect to work from home more often in the longer term, and 20 per cent expect to travel less for work.

EY 's research shows that the consumer appetite to return to hospitality and leisure venues is not driven by health and safety concerns alone.

It is also partly affected by expectations that the customer experience will take time to return to normal. According to the Index, the majority (69%) of consumers expect it will take months or longer before restaurants or bars return to normal, while 42% expect their experience of eating out will worsen in the long term.

Instead, many consumers have replaced eating out with at-home experiences, with 43 per cent saying that availability of delivery has become more important. Nearly a fifth (19 per cent) of consumers say they plan to spend more on meal kit delivery services post-Covid-19, while 16 per cent say they will spend more on takeaway meals from restaurants.