What does the cost of living crisis mean for cultural audiences?
There is not one person within your community right now who is not being affected by the cost-of-living crisis. It is a major concern for most, with 7/10 people now reporting that it, and the economy, are their highest political concerns. Both YouGov and Experian have been collecting data on the cost-of-living crisis and its impact on consumers. This research was recently presented at the Experian: Cost of Living and Consumer Confidence Webinar which I was fortunate enough to attend. It was insightful, but honestly, bleak. The findings presented at the webinar was the most recent corroborated data from May 2022.
The presentation consisted of two parts, one presented by each representative from their respective organisations, and demonstrated the following:
- Consumer confidence during the cost-of-living crisis.
- Where and why people are making changes to their spending.
- How this, in numbers, has impacted spending power and its effect on various sectors.
Whilst this talk wasn’t focused on the arts sector impact, there was enough evidence to understand the circumstances that people are currently dealing with and how this affects their relationship to cultural experiences. Cost is obviously a huge factor in whether people decide to engage with local arts events, so let’s look at the financial data first.
A trend we are seeing overall is continually decreasing consumer confidence. Consumer confidence refers to how frequently and purposefully people spend their income. Over the past six months, consumer confidence has tracked downward quickly. People are focusing on what they consider essentials, given that they are unsure about the power of their finances during this crisis.
- 84% of people surveyed within the UK reported that they are very worried about how they will be affected by the cost of living over the next six months.
- 24% of the responses reported already having to live without essentials, such as heating or food, due to the rise of inflation.
These are stark figures. This means that a quarter of people are already doing as much as they can in order to afford living whilst the crisis unfolds. Emerging data will show how this translates into the cultural sector, given that it’s not an essential spend.
Consumer confidence in the UK as a whole is being reported at its lowest level since YouGov began recording it in 2013. The Financial Times reports that it’s at its lowest in nearly fifty years, since 1974. The Guardian points out that it is now lower than it was during the 2008 recession. YouGov has garnered that all households felt less financially stable within the past thirty days, and are struggling to make sense of what the next twelve months will look like for them.
The NI Consumer Confidence index is currently sitting at 99.9, which means there is marginal number of more pessimists than there are optimists. If you’re not sure how the UK Consumer Confidence Index is calculated, this website explains it very well.
It’s important to remember that the data presented here is from May, and often it takes public perception a few months to correlate adequately to economic upheaval. This number is lower than other measured regions, such as Scotland (101.3).
Confidence does not necessarily translate into wealth – even affluent households are reporting negative feelings and say they are cutting back on goods. Young people do feel more confident generally than older people, but (generally, though not all) also have fewer financial burdens. We could speculate that this means young people may be able to attend cultural events more often than other demographics. However, with rent and bills increasing, this will obviously impact young people who experience lower wages. When looking at the numbers more closely, those of a lower social grade (and without assets like home ownership) state feelings of extreme worry, with 43% expressing this across all ages. This shows that there is a strong impact within mood as well, which could further act as a barricade for people engaging culturally if they have depression or anxiety.
As the cost-of-living crisis continues, groups of people are becoming more penny-wise overall.
Spending has reduced amongst consumers, who are choosing to buy less often. People are generally buying less frequently, with one in five people also choosing to buy cheaper alternatives. Cut-backs are happening with both non-essential and essential items. For example, over half of surveyed people are buying less takeaways (non-essential), but over a third are cutting back on essential food shops. This has also spilled over into cultural activities, with 45% of people saying that they are cutting back on trips to the cinema. The data also reported that 39% people have cut back generally on ‘hobbies’, which could refer, in part, to arts and cultural engagement.
Hospitality (which includes venues that host live performances) is a large point of focus for less spending. YouGov also stated that people are as likely to stop buying all together as they are to reduce. Within the next year, we may see how consumers choosing to cut back on things like fuel (27%) may impact willingness to travel to arts events and spaces, with that being factored into the cost of the event.
In regards to cultural engagement at home, people are cutting back on subscription and media services:
- 30% have cut back on music streaming services like Spotify, Apple Music, and Bandcamp.
- Digital TV and video streaming services have both experienced a drop in 28% of their customers.
Who is affected?
Households may respond differently to the crisis based on income and how it is currently spent. Experian provided the following example:
A household of a corporate worker will respond different than a nurse as they face varying financial challenges. The former household, who have £2300 to spend after paying for essentials, will soon have only £2130. This is a decrease in spending power by 7%. Whilst this household is still able to pursue cultural and social interests, they are still worried about the decrease of their finances and costs continuing to rise. The latter household - the nurse - currently has £660 post essential spend. This will translate into £550 over the oncoming months, and significantly affects their finances. This is a decrease in spending power by 16%. They are anxious about meeting their basic needs as costs increase and winter draws in.
As we can see, households are not impacted consistently by the cost-of-living crisis. However, all households share wariness around spending money given the chaos and intensity of price increases.
Obviously, people having less money, as well as choosing to be much more cautious with it, will have a large impact on venues and cultural centres. With the potential decrease in numbers and interest, cultural organisations may have to make difficult decisions regarding staffing and opening hours.
How can we prepare?
It will be difficult to get a handle on this and navigate our way through it. We are currently seeing confidence be eroded month by month, so it’s important that venues reach out to their audiences to try and grasp the moods and wants of their potential visitors. Having a good rapport with your audience by engaging with them beyond immediate services is an important method on getting a grip on how they – your local attendees – are being affected. This is a crisis that is currently in flux, so staying on top of the data and news regarding ongoing reports is crucial in understanding what people are experiencing.
The main thing that will impact people’s decision to visit will be value for money. At thrive, we are currently identifying the impact of the recent Pay What You Want model at the Belfast Book Festival. We are hoping that, if this is a viable option, that more organisations and events could take this on to allow people who have less money to still attend cultural events without being closed off from their communities and local arts culture. Keep an eye out on our case studies page as we will be publishing our analysis in the next few weeks.
The ‘pay it forward’ method is not new, as we have explored before, but is a similar ‘alternative’ model which could be used to help audiences keep engaging with their interests. This model has proved to be successful in terms of positive feedback, allowing people to attend multiple events if they could previously only afford one, increased loyalty, and facilitating an improved understanding of crowd numbers due to a preference in pre-booking.
Recently, a friend of mine was purchasing tickets for a gig when she was given the option of paying for a ‘half-price’ one, aimed at those for whom this may be a more viable option of attending. Unusual for Ticketmaster, though it did seem to be for a specific gig and not site-wide. No certification was required for this, and though she didn’t take the option, she felt it was a good thing to have for those who still want to attend cultural events without having so much of a barrier. However, it was fairly hidden on the website. When I was working front-of-house at cinemas, there was always a ‘concession’ ticket available at a reduced rate for those who needed it. I found it an infrequently used button, and felt that there could be further information on it for audiences to gauge what it means for them. Even for people who can afford full-price, it may be of reassurance to know – with financial situations as worrisome as they are – that they could interact with this if they need to.
There is an advantage that museums, live performance venues, and galleries have in that they cannot be recreated in the home in the same way watching a film, or consuming an interactive piece of media, can. This could lend itself to new audiences wanting to be stimulated for a small or negotiable fee, as well as returning audiences wanting to continue to engage in their interests. Understanding and assessing what audience motives are and how to interpret these is crucial in handling the cost-of-living crisis and its impact on your work. Reaching out to your audience is as important as it has ever been.