Consumer Behavior

Rising oil prices, driven by global energy tensions, are placing added pressure on consumers’ disposable income and reshaping spending habits within the On-Premise sector.

Hospitality Feels the Oil Price Shock

For consumers and businesses alike, energy has been a critical pressure point in 2026. After a period of relative stability in fuel prices in late 2025 and early 2026, conditions dramatically changed in early March when the Strait of Hormuz, through which roughly 20% of global oil supply passes, was effectively closed. Since then, Iran’s restrictions on passage and the suspension of transit by major carriers have hit oil stocks and driven up prices around the world.

This has had major implications for British consumers. Data from PetrolPrices.com shows the cost of petrol and diesel jumped by 20% and 36% respectively in just six weeks between the start of March and mid-April, and these hikes have had a big impact on household budgets. NIQ’s Consumer Pulse reveals that three in five (61%) people reported at least a ‘moderate’ cost-of-living impact in April – 8 percentage points more than a year earlier. The figure was even higher at 65% in the London and South East regions, which are often more insulated from economic shocks.

What it means for hospitality

Consumers’ concerns have quickly filtered through to On-Premise spending. In London and the South East, the number of consumers visiting at least once a week fell from 65% in December 2025 to 50% in March. Across Britain, only 46% were visiting weekly in April, one of the lowest levels of frequency in the past 12 months.
Among those going out less often, more than two thirds (70%) said it was because of increases to the cost of living, 5 percentage points more than a year ago. Rising fuel prices have intensified pre-existing financial pressures and forced millions of consumers to reconsider the frequency of their visits to pubs, bars and restaurants

Spending figures confirm the impacts. Average monthly spending in the On-Premise has fallen sharply, from £107 in April 2025 to £92 in April 2026. Nearly a third (31%) of consumers said they were spending less than usual this April, which is the highest proportion recorded in the last 12 months. Tighter budgets are also evident in the NIQ RSM Hospitality Business Tracker, which has recorded sub-inflation like-for-like sales growth for managed restaurant, pub and bar groups in every month of 2026 so far.

An intentional mindset

Consumers are also becoming more deliberate in their spending. A fifth (21%) of consumers say they are opting for cheaper drink options, while nearly a third (32%) are looking for cheaper food items, with these numbers rising year-on-year by 8 and 6 percentage points respectively. Those foregoing additional food items altogether have risen 3 percentage points to 26%, and nearly two thirds (64%) say they are actively watching what they spend.

All this data makes clear that British consumers are being forced into some difficult choices. While pubs, bars and restaurants still have an enormous appeal, many consumers are having to make more considered, price-led decisions about when they visit and what they buy.

The need for value

News of a potential deal to reopen the Strait of Hormuz will be a big relief to consumers. However, normal oil supply is still a long way off, and energy-related costs will remain high for some time to come. In this high-pressure, ultra-competitive environment, operators and suppliers will have to stay resolutely focused on delivering high-value experiences and compelling reasons for people to go out to eat and drink.

NIQ’s Consumer Pulse and other research solutions provide deep, up-to-data insights into consumers’ engagement with the On-Premise. To learn more about the benefits and opportunities for bespoke research to help businesses optimise strategies, contact the NIQ experts.