UK Leisure consumer trends

KEY TAKEAWAYS

1. Easing inflation and falling interest rates are offering some relief, but prolonged cost pressures continue to shape how consumers engage with leisure.
2. Consumer confidence shows brief improvements, yet overall sentiment remains fragile, driving a mix of value‑conscious everyday spending and selective discretionary treats.
3. Leisure operators face mounting operational challenges – from rising wages and tax changes to global cost volatility – intensifying pressure on margins and employment.
4. Despite economic headwinds, leisure spending remains surprisingly strong, with restaurant and entertainment demand consistently outperforming long‑term benchmarks.

Inflation pressures reshape leisure engagement

The UK leisure market continues to face a complex and fast-shifting environment, shaped by persistent economic pressures, fiscal policy changes, and evolving consumer behaviour. While inflation has eased considerably from its post-pandemic peak, it remained above the Bank of England’s (BoE) 2.0% target throughout 2025 and into early 2026. By December, CPI stood at 3.4% while CPIH reached 3.6%. However, January 2026 brought clearer signs of progress, with CPIH falling to 3.2% and CPI to 3.0%, driven by lower transport and food prices.

This renewed easing has provided some relief to household budgets, although the cumulative effect of prolonged price pressures may continue to influence leisure engagement. In response to weakening economic momentum, the BoE cut interest rates four times during 2025, bringing the base rate to 3.75% by December. These reductions sought to prevent the UK economy from slipping into recession, though consumer confidence continued to fluctuate in line with changes in inflation, interest rate decisions, and broader signals from government fiscal policy.

Confidence gains highlight emerging signs of resilience

Despite these pressures, there were brief signs of improving sentiment. In December 2025, the GfK Consumer Confidence Index rose two points to -17, driven largely by improved sentiment around major purchases ahead of the festive trading period.

However, this short-term uplift masked longer-term fragility. January 2026 marked ten years since consumer confidence was last in positive territory, with the index remaining firmly in negative territory at -16. While personal finance expectations strengthened – reflected in a +6 reading for expected finances over the next year – confidence in the general economic outlook continued to deteriorate.

This divergence highlights a wider behavioural pattern within the leisure economy. Consumers feel increasingly confident in managing their own budgets, yet remain sceptical about the broader economic environment. The result is a split between cautious, value-driven everyday spending and selective, occasional discretionary leisure purchasing when confidence temporarily lifts.

Consumers tighten essentials but protect selective treats

These contrasting behaviours are evident in Barclaycard consumer spending patterns. Across 2025, essential spending fell by 1.5%, with transactions down 2.2% as households reduced supermarket visits, traded down to cheaper lines, and cut impulsive purchases.

In contrast, non-essential spending grew by 1.5%, led notably by categories linked to wellbeing and selective indulgence. This included strong appetite for leisure-adjacent sectors such as health and beauty, alongside more frequent yet lower-value clothing purchases.

This dynamic carried through into the leisure sector itself. However, Barclaycard data for 2025 shows that while sales across all leisure and food and beverage (F&B) sub-categories increased, transactions fell in many areas. This suggests that growth has been inflation-driven rather than volume-led, reflecting rising operating costs for leisure operators – including higher wages, energy prices, business rates, and food input costs.

Operators adapt workforce models amid a changing cost landscape

Leisure businesses have been particularly hard hit by fiscal changes and escalating wage bills. The Chancellor’s decision to increase employer National Insurance Contributions from 13.8% to 15%, while lowering the threshold to £5,000, has materially increased staffing costs.

This pressure has been amplified by a 6.7% rise in the National Minimum Wage, now £12.21 per hour for those aged 21 and over – especially challenging for a sector heavily reliant on hourly staff and seasonal workers.

These pressures are now reflected clearly in labour market data. Employment across retail and leisure fell to 2.78 million in 2025, the lowest level on record and a decline of 97,000 jobs in a single year. Hospitality has been disproportionately affected. UKHospitality estimates more than 84,000 job losses across pubs, clubs and restaurants since the Spring Budget of 2024, driven by a £3.4 billion increase in operating costs. Forecasts suggest losses could rise to 111,000 by early 2026 without policy intervention.

Global uncertainty heightens cost volatility for operators

Alongside domestic challenges, global factors have continued to increase operating risk and cost exposure. Renewed tariffs introduced under President Trump, ongoing conflicts in Russia and the Middle East, and heightened currency volatility have all raised input costs for leisure businesses dependent on international supply chains.

Tariffs are driving up prices for imported food, beverages, equipment and technology, while currency fluctuations complicate procurement and pricing strategies for operators whose supply chains extend overseas.

Recent escalations in Iran – including US-Israeli military strikes and Iran’s retaliatory attacks across the region – have further destabilised the Middle East, a critical global energy corridor. This surge in geopolitical risk has intensified concerns around oil supply disruptions, increased war-risk premiums for shipping, and raised the likelihood of fuel and utility cost spikes for operators.

Conflict-related instability in global energy markets is pushing fuel and utility prices higher, placing further pressure on energy-intensive leisure venues such as restaurants, theatres, gyms, and live event spaces. As these pressures accumulate, rising prices and ongoing economic uncertainty risk dampening leisure demand, especially in mid-market categories.

Business rate reform: will it help or hinder?

The UK’s latest business rates reform – announced by Chancellor Rachel Reeves – is set to reshape how commercial properties are taxed, with major implications for retailers, high street businesses and, most significantly, hospitality venues, restaurants, entertainment spaces, and other leisure businesses.

The overhaul, due to take effect from April 2026, introduces a higher surcharge of up to 20% on large commercial properties with a rateable value above £500,000. This is expected to add around £600 million in tax burden to major retail and leisure operators.

This could directly impact major cinema chains with large floorplates, for which the change could further erode margins – especially in a sector already grappling with fluctuating attendance, rising energy bills, and competitive pressure from streaming services. To offset these costs, operators may be forced to raise ticket prices, reduce staffing, scale back investment in refurbishments or new technologies, or even reconsider the viability of underperforming sites.

Conversely, the reform will introduce lower rates for smaller businesses – essentially, the higher surcharge on larger properties will fund the relief of up to 40% to be given to any occupied retail, hospitality or leisure (RHL) property with a rateable value below £51,000. These venues will benefit from permanently reduced multipliers designed to ease financial pressure on independent operators and high street establishments such as restaurants, cafés, pubs, and small entertainment venues.

However, the interim changes for the 2025–26 financial year have reduced RHL relief from 75% to 40%, leaving many restaurants, F&B operators, and small hospitality and entertainment businesses facing steep rate increases and heightened financial pressure in the short term.

Government concessions for pubs – targeted relief amid rising pressure

In response to mounting sector-wide concern, the government has introduced a dedicated support package for pubs. This includes a 15% reduction in business rates bills from April 2026, followed by a real-terms freeze for a further two years.

This concession is expected to save the average pub around £1,650 in 2026–27, with approximately 75% of pubs seeing their bills fall or remain unchanged. While widely welcomed by pub operators, industry bodies have emphasised that this support is highly targeted and does not extend to the wider hospitality sector.

Restaurants, hotels, cafés, night-time venues and other leisure operators – many of which are facing similar cost pressures from wage rises, insurance inflation, utilities and supply chain volatility – warn that they are being left behind. Some non-pub hospitality businesses are facing rate increases of more than 50% as relief tapers off, prompting renewed calls for broader, sector-wide support.

Phasing in the impact: how transitional relief aims to protect operators

An important, though often overlooked, part of the reform package is the introduction of a £3.2 billion Transitional Relief scheme. This will cap the annual increase in business rates bills for properties whose rateable values rise significantly following the 2026 revaluation.

This is particularly relevant for leisure businesses, many of which occupy properties whose rental values have rebounded post-pandemic, creating the potential for sudden and sharp bill increases.

Under this scheme, annual increases will be capped according to a property’s rateable value. Smaller properties with values up to £20,000 (£28,000 in London) will see rises limited to 5% in 2026–27 before gradually increasing in subsequent years. Medium-sized properties between £20,001 and £100,000 will face a 15% cap in the first year, with higher limits thereafter, while larger properties above £100,000 will have increases restricted to 30% in 2026–27, with further controlled rises over the following years.

This means that even where a leisure operator faces a steep valuation jump in 2026, the increase in their bill will be phased in rather than applied immediately – the government suggests this will act as a crucial buffer for cinemas, gyms, theatres, hotels and visitor attractions operating on tight margins.

Supporting Small Business scheme extension

A further layer of protection comes from the expanded Supporting Small Business (SSB) scheme, worth over £500 million. This scheme prevents sharp jumps for small businesses that lose small business rates relief due to revaluation changes, and it has been extended to include businesses that previously qualified for RHL relief. This is especially important for independent pubs, cafés, boutique studios, and small leisure venues transitioning into the new, permanent tax structure.

Together, Transitional Relief and the SSB scheme are said to form a significant safety net that softens the immediate financial shock of the new system – even if they don’t eliminate the underlying pressures.

Continued industry concern

Although the reforms aim to rebalance the tax system, industry groups – including the British Retail Consortium and leading operators such as M&S and Tesco – have warned that these changes could accelerate venue closures, discourage investment and shift costs onto consumers as businesses try to absorb the new tax burden.

Many retail and leisure leaders are calling for their sectors to be excluded from the higher business rates multiplier entirely, arguing that the proposed reform risks undermining high street recovery just as trading conditions begin to stabilise.

Nevertheless, both large chains and independent leisure operators are re-evaluating operations amid rising costs and shrinking margins. Smaller venues are contending with increased overheads following the reduction in rates relief, while larger groups anticipate passing on tax costs through price hikes when the reforms take hold in Q2 next year.

The Centre for Retail Research (CRR) forecasts that more than 17,000 stores closed in 2025, around 14,000 of which were independent businesses, many in hospitality and leisure. Meanwhile, a recent BRC survey found that two-thirds of CEOs plan to raise prices in the coming months, citing rising employment and tax costs – creating risks for inflation and casting uncertainty over the recovery trajectory for the high street and the wider leisure economy.

Leisure spending defies gravity despite economic headwinds

Given the prevailing economic uncertainty and the pressure it has placed on both leisure operators and consumers, it would be reasonable to assume that leisure spending has remained subdued for an extended period.

However, several key indicators suggest a more optimistic picture. Revolut’s monthly card spend data for leisure has consistently over-indexed relative to the 2023 average, pointing to a sustained period of consumer engagement.

Restaurant spending (actual) unsurprisingly peaked during the summer, reaching an index score of 127 in July – 27% above the 2023 baseline. Notably, seasonally adjusted restaurant spend has also remained elevated, having done so since January 2025, indicating that this trend reflects more than just typical seasonal behaviour.

Seasonal adjustment removes the influence of predictable patterns such as holidays, weather changes, and school terms, allowing for a clearer view of underlying consumer trends. This sustained overperformance suggests a structural shift in leisure demand rather than a temporary upswing.

Entertainment spend – including live events, sporting fixtures, cinemas, membership clubs, tourist attractions and home entertainment – has shown even stronger performance. Seasonally adjusted figures have grown throughout 2025, peaking in October at 40% above the baseline, and have remained above the 2023 average since December of that year. This sustained elevation suggests a robust and enduring appetite for entertainment experiences, extending beyond seasonal fluctuations.

GlobalData’s monthly survey of 2,000 consumers – conducted among a demographically and geographically representative sample – reinforces the trends observed in Revolut’s card spend index. As illustrated in the chart below, consumer expenditure on leisure activities has remained consistently elevated. Since November 2022, spending has tracked above the August 2018 index baseline, with a notable acceleration from July 2023 onward, where it has sustained levels at least 20% above the long-term average. The latest data for December 2025 places leisure spend 90.0% above the 2018 baseline, underscoring the strength and persistence of consumer demand in the sector.

Selective indulgence and at-home substitution redefine leisure choices

The Barclaycard’s detailed subcategory data does add some nuance, however. Hospitality and leisure spending grew at an average monthly rate of 2.7% across 2025, while transaction volumes declined by 0.9%, reflecting higher spend per visit rather than increasing frequency.

Digital Content & Subscription and broader Entertainment spending – including streaming services, gaming, live events, cinema visits, membership clubs and tourist attractions – recorded robust sales growth of 5.6% alongside a 3.2% rise in transactions, signalling both deepening engagement and higher spend per transaction.

Restaurant sales increased by 1.6% even as transactions fell by 1%, indicating stable footfall but higher average spend – likely driven by menu price inflation and strategic upselling. Pubs, bars, clubs and takeaway operators showed a similar pattern of rising sales but declining transaction volumes, suggesting that consumers are visiting these venues less frequently but spending more when they do, or consolidating more casual, frequent outings into occasional premium experiences.

These patterns reflect a wider polarisation in leisure spending as consumers adapt to cost pressures. Many households are reducing the frequency of eating out – yet when they do, they are spending more per occasion, influenced by inflation and also by a desire to make each visit feel worthwhile.

At the same time, consumers are turning to cheaper at-home entertainment through subscriptions and digital content, while still treating themselves to more expensive leisure experiences such as concerts, live events and cinema trips.

This dual behaviour – frugality in routine choices paired with willingness to invest in high-value experiences – has become one of the defining shifts currently shaping the leisure economy.

Is the juxtaposition between consumer economic headwinds and leisure engagement sustainable?

Despite mounting financial pressures on households and rising operational costs for businesses, UK leisure spending remained unexpectedly resilient throughout 2025. This trend reflects a behavioural shift among consumers who increasingly prioritise experiences – such as dining out, travel, and entertainment – for their emotional and psychological value. After years of pandemic-related restrictions and economic uncertainty, leisure activities are now viewed as essential outlets for wellbeing and escapism, even as broader financial constraints persist.

Pent-up demand continues to play a significant role. Many consumers are still catching up on missed holidays, events and social outings, with leisure habits becoming deeply ingrained once again. In some cases, households are maintaining these activities by relying on credit or dipping into savings, despite rising living costs.

This dynamic has created a “two-speed” leisure economy: while lower-income groups are feeling the strain, middle- and higher-income households retain discretionary spending power. As a result, premium experiences remain in demand, while budget-conscious consumers seek value-driven alternatives.

Another contributing factor is the substitution effect. As consumers cut back on larger financial commitments – such as home improvements or big-ticket purchases – they continue to spend on smaller, more frequent leisure activities. A weekend getaway or a meal out feels more manageable and emotionally rewarding than long-term investments, making leisure spending a relatively protected category in household budgets.

However, elevated leisure spending is not without risk. Persistent inflation, uncertain interest rate trajectories, further tax changes in the Spring Budget, and ongoing geopolitical instability could quickly dampen consumer sentiment. The leisure sector must prepare for uneven demand; flexibility in pricing, targeted promotions and operational agility will be critical to sustaining consumer engagement through 2026.

However, elevated leisure spending is not without risk. Persistent inflation, uncertain interest rate trajectories, potential tax changes following the Spring Budget, and ongoing geopolitical instability could quickly dampen consumer sentiment. The leisure sector must therefore prepare for uneven demand; flexibility in pricing, targeted promotions and operational agility will be critical to sustaining consumer engagement through 2026.

Consumer sentiment has improved slightly but remains cautious. GlobalData’s survey shows that while 53.8% of consumers expect to reduce leisure spending over the next six months – an improvement from 56.9% at the end of Q3 – only 9.7% expect to spend more. This suggests that although sentiment is improving at the margins, caution remains deeply rooted.

Outlook for 2026: resilience meets structural challenge

Looking ahead, the UK leisure market enters 2026 with a blend of opportunity and uncertainty. Inflation is forecast to ease further, and recent interest rate reductions should gradually improve household spending capacity.

Nonetheless, operators will continue to face significant structural pressures from rising wage costs, business rates reform, elevated energy prices, global trade disruptions, and ongoing supply chain volatility.

Although consumer appetite for leisure remains culturally and emotionally entrenched – and in many sub-sectors, stronger than pre-pandemic levels – the market is likely to experience uneven demand as consumers balance rising costs with their desire for meaningful experiences.

Leisure businesses that remain agile in pricing, invest selectively, refine operational efficiency, and enhance the quality and distinctiveness of their offerings will be best positioned to navigate the shifting market landscape. While challenges persist, the sector’s resilience through 2025 provides genuine grounds for cautious optimism in the year ahead.

_{Read the articles within Spotlight: UK Leisure Market 2026 below.}