Meteorological phenomenon and economic headwinds dent consumer confidence

By James Lawrence

Published: 19 March, 2025

A new survey released by Lumina Intelligence suggests that a combination of inclement weather and financial pressures impacted on-trade visits in February 2025, although the pub sector enjoyed a relatively strong performance.

According to Lumina Intelligence: “In February 2025, the increase in the proportion of UK adults who participated in an out-of-home (OOH) occasions slowed notably to just +0.3ppts, with 57.5% of UK adults participating in an OOH visit during the period. While overall penetration growth stagnated, engaged consumers displayed resilience by increasing their visit frequency by +5.8%, averaging 1.5 occasions per week. However, consumers demonstrated caution, limiting on-the-go visits and higher-ticket social occasions in response to economic pressures and poor weather.”

However, the report added that “with fewer high-ticket, longer dwell-time occasions such as lunch and dinner in restaurants, the market saw a shift towards more accessible drink-led occasions”.

Read more: ProWein 2025 organisers bullish despite fall in visitors

As a result, UK pubs and bars were able to capitalise on this trend, increasing their share by +1.8 percentage points, while drink-led occasions grew by 2.7%.

In addition, quick service restaurants (QSR) and pubs were key drivers in shaping the UK’s food consumption trends.

The reported stated: “Burgers (+2.1 percentage points), pizza (+0.9 percentage points), and sandwiches (+1.3 percentage points) all increased their share of occasions, fuelled by the continued popularity of these formats within QSR and pub settings. In response, operators have been focusing on enhancing classic menu items, with premium burger and sandwich offerings emerging as a strategic focus to meet consumer demand for higher-quality propositions.”

Meanwhile, the latest company insolvency statistics show accommodation and food services insolvencies fell 7% from 3,747 in the 12 months to January 2024 to 3,474 in the 12 months to January 2025.

However, leading audit, tax and consulting firm RSM UK noted that insolvencies in the sector had increased “21% month-on-month, from 225 in December 2024 to 273 in January 2025, and were up 3% when compared to the same month last year (265)”.

Saxon Moseley, partner and head of leisure and hospitality at RSM UK, commented: “Hospitality trade at the start of the year was particularly tough, so the rise in insolvencies in January was expected, but perhaps not as bad as feared. While some operators managed to weather the storm at the end of last year to maximise trade during the festive period, January’s figures suggest the resilience of these businesses could be starting to slip.

“With more headwinds to come from April in the form of tax rises, combined with new regulatory requirements, pressures on the leisure and hospitality industry are only set to increase. It’s crucial that businesses closely monitor their cashflow during this period of uncertainty.”

Katie Gallagher, insight lead at Lumina Intelligence, added: “The on-trade is facing a tidal wave of cost increases from April, not least in the form of higher NI contributions, National Minimum Wage increases and business rates relief decreasing from 75% down to 40%. Alongside cost increases the on-trade is also adapting to changing consumer preferences, including more moderate alcohol consumption.

“Year-on-year household spending power has increased despite current poor consumer sentiment around finances, and we see in our data that more consumers are returning to the on-trade for meals and drinks to spend time with friends, especially in the 25-34 age bracket – a behaviour that was curtailed across 2023. Consumers are seeking less but better alcohol, often opting for fewer drinks but trading up to more premium ranges to really enjoy the flavours and quality.”

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