Hospitality sector to face challenges as consumers cut back dining out this Christmas

Two in five families opt to scale back on eating out this holiday season.

The hospitality sector is set to brace another hit as consumers plan to cut back on eating and drinking out this Christmas, according to Saxon Moseley, head of leisure and hospitality at RSM UK.

“With significant fiscal headwinds to come, operators will be bracing for a rocky 2025 if festive spending is down, and ultimately, job losses and business distress could be a real reality for some,” Moseley said.

According to RSM UK’s latest consumer outlook, families expect to spend an average of £760 on Christmas this year, up by 26% to £158 from £602 last year as expected spending hits a three-year high as the cost-of-living pressure eases.

The top three categories that families plan on spending more on include Christmas presents (33%), Christmas dinner (33%), and food and drink at home (32%).

Meanwhile, the biggest cutbacks will be homeware (42%), eating and drinking out (40%), and adult fashion (37%).

Last year, consumers spent around a third more than anticipated, meaning the 2024 average spend could exceed £1,000 if a similar overspend occurs again this year.

A third of families (33%) plan on using some form of credit, including a credit card, buy now, pay later arrangements, a loan, or an overdraft, to fund Christmas this year.

Half of all families (50%) plan on bringing forward their Christmas spending to spread the cost of purchases and take advantage of discounts such as Black Friday and Cyber Monday.