What's in store for QSRs this Christmas season?

For one, more people are choosing to not eat out this festive season.

More than two in five Brits or 44% are choosing not to dine out this festive period citing financial pressures as the main reason, research by Forbes Advisor said.

According to the report, a significant one-quarter of businesses (25%) in the UK's accommodation and food service sector have sought to counteract the impact of reduced consumer spending by increasing their December prices. Notably, this sector boasts the highest proportion of businesses which have chosen to raise prices in December 2023. 

The 44% reduction in the number of people dining out is equivalent to the same period in 2022. However, consumers are not just dining out less frequently - they are also gravitating towards more affordable options. Almost a quarter (24%) say they will be more selective when it comes to ordering as a way to save money.

Despite the decline in spending during the festive period, there is an encouraging trend in year-on-year cutbacks. Around one in six individuals (16%) are opting to scale back on dating to help save money, compared to almost a quarter (24%) in 2022. Furthermore, one in ten (10%) are now choosing less expensive restaurants during the 2023 festive season, as opposed to nearly a quarter (24%) who made this choice in 2022.

The narrative remains consistent in the realm of alcohol consumption, where nearly one in five individuals (19%) are now opting to cut costs on alcoholic beverages, down from 24% the previous year.

The study brings to light a significant revelation: over a third of participants (37%) find themselves tapping into their savings to fund their social activities. Notably, the younger demographic (18-34) is bearing the brunt, with almost half (46%) relying on their savings for social holiday spending. This is closely followed by more than a third (37%) of 35-54 year olds and just under a third of those aged 55 and older (31%).

"Many businesses in the accommodation and food services sector - hotels, B&Bs, restaurants, pubs, cafes and so on, and their associated supply chains - rely on December to pay for the rest of the year, or at least a good part of it. If the income they rely on during the festive season fails to materialise, it can have a serious impact on their viability. At the least it can mean cutting back on staff hours and putting any New Year investment plans on ice,” Kevin Pratt, business expert at Forbes Advisor says

"Increasing prices is a natural response, but there are obvious risks, such as deterring yet more customers from venturing out for a meal, and obliging some of those that do to spend less,” Pratt added.