Home Entertaining on the Rise Amid Cost of Living
Official figures have seen a decrease in spend on restaurants and at the same time seen an increase in home accessories and furniture. As the cost of living has been hurting the public a lot more, people have been spending extra time entertaining guests at home instead of spending money in eateries and establishments. Retail sales were propped up in March due to Mothers’ Day, but overall it increased by 5.1%.
According to data from the British Retail Consortium, home accessories and furniture saw the biggest increase in any retail category. Eating out has been cut from household budgets and this is set to continue throughout April. Several price increases have been felt at the beginning of this month, including from council tax, mobile phone bills and utilities. As well as this, personal tax allowances have been frozen.
A study last year saw almost 40% of households remove eating out from their budget, although a separate survey reported up to 83% cut restaurant spending. Now that a new financial tax year is upon us and restaurants have been bearing the brunt of their cost increase for a while, this will only get worse. Signs have already pointed to more people staying at home and entertaining guests there too.
Barclays reported a drop in retail sales but an increase in home streaming services, most likely linked to people opting for the cheaper alternative of staying at home. Seeing as March has been the wettest on record for 40 years, it’s not surprising that eating out hasn’t been on the cards, even as households look to slash their budget where they can.
Food inflation continues to be high, but consumers are looking for ways to cut their costs. While events like the king’s coronation are expected to boost retail sales next month, businesses are still facing cost pressures. Wholesale costs and wages are just some of the issues that are causing a strain for price rises, and some believe these are likely to continue for the time being.
Despite the Bank of England believing inflation is likely to fall heavily this year, Andrew Bailey has already warned businesses to not set costs too high. Inflation unexpectedly jumped in February, and further price rises from businesses could cause it to increase yet again. If businesses are thinking of raising prices to counteract this, inflation will only worsen and stay higher for longer, causing the Bank Rate to be put up even higher.
Last year, research from MetLife UK revealed that at least 40% of people would have to give up everyday perks, such as eating out, coffee and treats, as a result of the cost of living if they had to reduce their overall spend. Further down the list was entertainment subscriptions, at 28%, but as March saw an overall increase in video subscription services compared to this time last year, priorities have shifted. The British Association for Screen Entertainment recorded a 14.3% increase in home entertainment across the whole of 2022.