From groceries to housing, everything seems to be getting more expensive. According to the Office for National Statistics, the UK’s inflation rate remained high in March, with the Consumer Prices Index including owner occupiers’ housing costs (CPIH) rising by 8.9% in the 12 months to March 2023, down slightly from 9.2% in February.
The largest upward contributions to the annual CPIH inflation rate came from housing and household services, primarily from electricity, gas, and other fuels, and food and non-alcoholic beverages.
The rising cost of living in the UK has caused many people to re-evaluate their spending habits.
The Covid lockdowns and restrictions over the last few years made it difficult for people to go out and socialize, which led to an increase in the number of people choosing to entertain at home.
However, just when things began to open up and feel normal again, soaring inflation hit consumers hard over the past 12 months.
Going Out Has Become Too Expensive
Now, with the ever-rising cost of living in the UK, once again more people are choosing to entertain at home.
Record inflation has left many people struggling to make ends meet, forcing them to cut back on luxuries like dining out, going to the cinema, or attending events.
However, this hasn’t stopped people from socializing; instead, more and more people are opting to entertain at home, which is fast becoming the new normal for many people.
As the cost of dining out in the UK has become prohibitively expensive for many households, there’s a rise in purchases of home entertainment systems, kitchen equipment, and outdoor living accessories.
According to new figures from the British Retail Consortium (BRC), total retail sales increased by 5.1% last month compared to a year earlier, with sales of home accessories and furniture rising sharply.
The BRC said this was due to people eating out less to save money and entertaining at home instead.
Barclays also reported that people cut back on eating out in March, but spending on streaming services revived as more people chose to entertain at home.
While the cost-of-living crisis continues to put pressure on households, many are finding creative ways to adjust their spending habits and make the most of their homes.
Sprucing Up the House Instead
As the trend of entertaining at home continues to grow, it’s likely that we’ll see more people investing in their homes and creating spaces that are both comfortable and stylish.
This, combined with the growing trend for healthy eating, has resulted in a surge of interest in home cooking.
Sales of kitchen equipment such as slow cookers, air fryers, and blenders have skyrocketed in recent years, as more people opt to cook meals from scratch.
Many people have also invested in kitchen gadgets like sous-vide machines and pressure cookers, which enable them to create restaurant-quality meals at home.
Additionally, by entertaining at home, people can save money on food and drinks, transportation, and other expenses associated with going out.
Statistics show people are investing in home bar equipment, such as cocktail shakers, glassware, and mixers, to create a bar-like experience at home.
Home entertainment systems, including soundbars, projectors, and televisions, are also in demand, creating a cinema-like experience at home.
Meal Kits, Potlucks & Garden Gatherings
The outdoor living trend has also seen a surge in popularity, with more people investing in garden furniture, firepit, barbecues, and outdoor heaters.
With the unpredictable British weather, it’s important to have a comfortable and inviting outdoor space that can be used all year round.
Sales of outdoor heating solutions have risen sharply, as people seek to extend the use of their gardens beyond the summer months.
The increasing popularity of meal kits and food delivery services has also contributed to the shift towards entertaining at home.
These services provide easy and convenient meal solutions, allowing hosts to create restaurant-quality meals at home without the hassle of grocery shopping or meal planning.
Meal kits and food delivery services are affordable options, compared to dining out or ordering takeaway, saving hosts money without compromising on taste.
Additionally, many households are choosing to host potluck dinners, where guests bring a dish to share — this reduces the cost of entertaining and allows everyone to contribute to the meal.
Others are opting for BYOB (bring your own bottle) parties, which again reduces the cost of providing alcohol for guests.
New Ways of Partying at Home
The trend of entertaining at home has also given rise to a new kind of hospitality industry, with the emergence of Airbnb experiences, cooking classes, and other home-based activities.
These experiences offer a unique and personalized way for people to socialize and learn new skills in a comfortable and intimate setting.
According to a recent survey conducted by YouGov, 65% of UK adults are now more likely to entertain at home than they were before the pandemic.
This shift in trend is not just limited to the younger generation, with older adults also embracing the idea of entertaining at home.
Many households have also invested in board games, card games, and party games to keep their guests entertained.
In addition to the physical products people are buying, there has also been a shift in the way people approach home entertaining.
People are finding that hosting parties at home allows them to create a more relaxed and informal atmosphere, where guests can socialize without the constraints of a formal setting.
This has led to a rise in themed parties, such as murder mystery evenings or cocktail parties, where guests can dress up and immerse themselves in the experience.
Trend Depends on Inflation
KPMG’s latest report says this trend is expected to continue throughout April as bills such as council tax, mobile, and utility bills rise, and personal tax allowances are frozen, and consumers are continuing to reduce costs by cutting back on discretionary spending.
Spending on consumer cards rose by 4% compared to the previous year, with digital content and subscriptions seeing the highest growth since October 2021, helped by new seasons of popular TV shows.
The Bank of England predicts that inflation will fall later in the year as food and energy costs come down.
The government has been taking measures to address the rising cost of living, including cost-of-living support worth an average of £3,300 per household over this year and last, funded through windfall taxes on energy.
The Office of Budget Responsibility (OBR) predicts that inflation will fall to 3.75% by the final quarter of 2023, well below half the current level.
However, investors have increased their bets that the Bank of England will lift interest rates to 4.5% from 4.25% at its next meeting on May 11th, as core inflation is likely to prove more stubborn.
Despite all of these challenges, the King’s coronation in May and other major events in the months ahead are expected to boost retailers’ bottom lines, which could help strengthen the overall economy.
But for now, whether it’s a dinner party with friends or a movie marathon with family, entertaining at home appears to be the new normal for many British households struggling with the ongoing cost-of-living crisis.
The views expressed in this article are not to be construed as personal advice. You should contact a qualified and ideally regulated adviser in order to obtain up to date personal advice with regard to your own personal circumstances. If you do not then you are acting under your own authority and deemed “execution only”. The author does not accept any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Where this article is dated then it is based on legislation as of the date. Legislation changes but articles are rarely updated, although sometimes a new article is written; so, please check for later articles or changes in legislation on official government websites, as this article should not be relied on in isolation.
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