How retiree discretionary spending is supporting consumer-facing CRE in the UK
Retiree discretionary spending is growing, driven by increased leisure demand and wealth transfer, shaping the future of consumer real estate.
Retiree discretionary spending is emerging as a significant driver for consumer-facing commercial real estate (CRE), particularly in a challenging economic landscape. This segment has shown resilience, with a growth rate of 1.5% per annum in real terms from 2022 to 2024, contrasting sharply with declines in working-age discretionary spending.
The growth in retiree spending is concentrated in areas such as recreation, culture, and hospitality, with notable increases in restaurants and hotels at 5.4% annually. As the population of retirement-age households is projected to rise from 13 million to nearly 17 million by 2040, the demand for leisure and experiential services is expected to grow substantially.
Moreover, a significant wealth transfer from baby boomers to Generation X is underway, which will further support discretionary spending patterns. While the current economic environment presents challenges, the long-term trajectory for retiree spending remains positive, driven by stable income sources and an increasing number of households.
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