There’s no way to sugarcoat it: the cost of living is a crisis, and it is rising, negatively impacting businesses.
As a business owner or director, we know you’re working hard daily to keep your doors open and your staff employed. We also know that you want to offer your customers the best possible experience at every turn.
But how do you ensure that happens when the cost of goods increases? Keep reading to find out more.
Consumer Habits Are Becoming Unpredictable
As the costs of living continue to rise, consumers are becoming more aware of the need to be cautious with their spending. They are choosing to spend money on experiences over products. This means that owners and directors in the hospitality industry need to consider how they can adapt their business models to attract customers who may be spending less than they used to.
Growing food prices
The cost of food has risen by nearly 30% over the last year, and it’s expected to go up even further as we head into 2023. There’s a lot of speculation about what’s causing this—some say it’s due to increased demand from China and other countries, while others think it’s related to climate change. Either way, we need to start making changes to keep our food costs under control.
With that said, a massive 50% of UK adults surveyed said they would give up takeaways to save money.
In pubs and bars, more people are choosing to drink at home
People don’t have time to go out as much anymore; when they do, they still want to save money. We’ve seen a massive increase in customers bringing their drinks into bars or even just keeping them at home and drinking from the cans.
This isn’t because people don’t like going out—in fact, it’s the opposite—but people just don’t want to spend what little money they have on drinks that are often twice as expensive as what you’d pay at a supermarket.
The same thing is happening in restaurants
People who usually eat out once or twice a week are now only eating out once or twice every two weeks, and even then, they’re opting for cheaper restaurants or takeaway options from supermarkets rather than pricier sit-down places.
At first glance, this might seem like bad news for restaurateurs, but it isn’t! The reason why is simple: most restaurants have been offering their customers incredibly high-quality food at prices that are far too high for many people right now.
Consumers Are Savvier than Ever
Consumers are more aware of their options and how much it costs to buy things. They know that avocados can cost $4 in Australia and just $1 in South Africa, so they shop for bargains.
They are also very aware of quality: if you serve them bad coffee, they won’t return. If you give them bad service, they won’t come back either. And while consumers used to be willing to pay more for fancy ingredients, trendy food and drinks have become standard expectations at many restaurants. So if you don’t offer them something special (like organic produce), your business will suffer as more people go elsewhere instead!
Consumers now expect value for money across all aspects of life, including travel experiences such as train rides or cruises; movie tickets; museum entry fees, etcetera.
Consumers Want Tailored Services
As the cost of living increases, consumers will look for ways to save money. However, it’s important to remember that consumers don’t want to be treated as numbers or statistics. They want the same level of service they would normally receive in a higher-priced setting.
Consumers want their needs met without having to pay top dollar for it. For example, the customer may not be able to afford a trip overseas but still wants the experience and excitement of a vacation without leaving home. In this case, companies need only offer something similar (e.g., online shopping).
It’s important that whatever product or service you provide at an affordable price is good enough quality so that customers won’t regret their purchase decision later on down the road when prices rise again due to inflationary pressures from increased costs of living expenses (renting an apartment instead living off campus etc.).
One way businesses can help keep customers loyal – both now and into future years when the cost of living goes up again after the recession ends – is by providing tailored services. These services should be tailored based on customers’ feedback regarding what kind of things matter most when shopping around and trying something new before making a final purchase decision.
How Businesses Can Take Advantage Of These Opportunities
If you’re a business owner in the hospitality industry, you know that consumer behaviour is changing. More and more people are choosing to stay in their homes instead of going out, and they’re getting pickier about where they spend their money.
If you want to attract customers to your pub or bar, or restaurant, you’ll need to start thinking about how to market yourself differently than before.
Here are some ideas for how you can adjust:
- If you’re a pub or bar, consider offering an all-you-can-eat deal. This would be great for groups of friends who want to hang out together but don’t want to spend too much money. It could also be a good option for families looking for something fun to do on a Friday night.
- Start a rewards program for loyal customers.
- Offer discounts for student ID holders (or other groups based on demographics)
- Host social events like trivia or karaoke nights where everyone pays a small fee to participate but gets one free drink (or two).
- Get involved with local charities through fundraisers and donation drives
The Bottom Line
As we’ve seen, consumers are looking for new experiences and fresh ways to enjoy their time. They are also more aware of the cost of living crisis in general. This means hospitality businesses must adjust to keep up with these changes if they want to stay competitive in today’s market.
To keep up to date with industry news as well as tips and tricks to grow your establishment, view our other articles here.