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Fighting fit

As long as the public keeps spending on leisure, it will remain a hotbed of M&A. Grant Murgatroyd looks at a UK sector that’s in rude health.

When times are tough, consumers tighten their purse strings and concentrate on the necessities. Discretionary spending – money spent by consumers on things like holidays and luxuries – is cut back. That’s the theory, but what’s the practice?

Consumer spending in Britain fell by almost 5% in 2008, but has since recovered, rising by about 2% annually since 2011, according to Deloitte’s UK Consumer Tracker. No doubt low interest rates and the ready availability of consumer credit have buoyed such spending.

Going out, eating in restaurants and taking long holidays have been among the best performing sub-sectors. Brexit may have killed the mood, with 37% of consumers no longer confident about non-essential spending over the next 12 months, but overall the leisure sector is still in rude health.

“Consumers are not cutting back on their leisure spend,” says David Burns, managing partner at Phoenix Equity Partners. “People are doing, rather than wearing. There is a polarisation. Value-for-money is incredibly important, but premium is also doing well. It is the guys in the middle who are finding it more difficult.”

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