Pub bosses cautiously optimistic about future

By Nikkie Sutton

- Last updated on GMT

Looking ahead: some 68% of all business leaders were optimistic about the prospects for 2019
Looking ahead: some 68% of all business leaders were optimistic about the prospects for 2019
Confidence levels in hospitality are varied in early 2019, with business leaders in the pub sector showing cautious optimism about what the next 12 months will bring, research has found.

CGA’s 2019 Business Leaders’ Survey​ discovered more than half (53%) of leaders of drink-led operators said they were feeling optimistic about the general market in 2019 compared to just 33% of food-led business bosses.

The poll, which was conducted in partnership with CPL Online, found two thirds (68%) of leaders were optimistic about prospects for their business over the next 12 months. This was five percentage points higher than in November 2018.

However, the number of leaders feeling optimistic about prospects for the market in general is significantly lower at 39% – flat on November.

Fluctuating confidence levels are prompting leaders to scale back their expansion plans, according to the survey.

Only one quarter (24%) of leaders revealed they were planning to open more than five new sites this year – that figure was 45% during CGA’s 2016 survey.

Two fifths (40%) of all leaders said their business had traded ahead of expectations in the past six months, which is 14 percentage points higher than last year’s survey.

Low expectations

However, CGA’s Coffer Peach Business Tracker uncovered like-for-like sales growth of just 0.8% for managed pub and restaurant groups in 2018, this may be more a reflection of leaders’ relatively low expectations for 2019 than of strong trading.

There were several reasons for caution in the Business Leaders’ Survey​. Brexit is causing significant uncertainty and with the availability of back-of-house staff a key concern, the UK’s exit from the EU is likely to add to this.

Delivery is viewed as a double-edged sword, with benefits of incremental sales but concerns about its negative effect on brand perception.

Healthy eating, sustainability, technology and the importance of the all-round experience are among the other big trends the survey indicates will be at the top of leaders’ in-trays in early 2019.

As well as emphasising the need to understand these trends, the survey highlighted the importance of consistency delivering on the fundamentals of hospitality, including service and food and drink quality.

CGA group chief executive Phil Tate said: “Our Business Leaders’ Survey​ reveals an industry caught between instinctive confidence for growth and caution about the challenges they face.

“It is encouraging to find more than two thirds of leaders are optimistic about prospects for 2019 but concerning that far fewer feel upbeat about the market as a whole.

“We are also seeing a growing divide in confidence levels between pub operators, many of whom enjoyed a good 2018, and the restaurant sector, which endured a tough year."

Market saturation

Tate added: “With so much talk of market saturation, indications that leaders are reining in their new openings should be little surprise.

“On top of that, Brexit is casting a long shadow over ambitions. But difficulties for some operators will always create opportunities for others, and leaders of well-defined and customer-focused brands are going into 2019 with grounds for cautious optimism."

CPL Online chief commercial officer Jamie Campbell outlined how the eating and drinking-out sector had been disrupted in recent times. 

He added: “This year’s Business Leaders’ Survey​ paints a fascinating picture of a sector facing a multitude of challenges in a time of rapid change.

“The soaring popularity of delivery, the roll-out technology and the consequences of Brexit are just three of the major disruptions that have come to the fore in recent years – 2019 will no doubt be another year of significant evolution for restaurants, pubs and bars.

“But amid upheaval, it is good to see the amount of focus on the people who are so crucial to delivering a great experience to customers.

“Be it supporting individuals with EU settlement, providing clarity on career progression or having a clear strategy for engagement, businesses that can keep a laser focus on the essentials and equip their front-line teams with the skills and knowledge to deliver an experience will have a crucial head start in an ultra-competitive market this year.”

Related topics: MA500 Business Club

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