Hospitality sector on course to lose more than £53bn in sales during ‘disaster’ 2020

By Stuart Stone contact

- Last updated on GMT

Related tags: Cga, ukhospitality, Finance, Pubco + head office, Tenanted + leased, Food, Drink

The UK’s hospitality sector has seen sales figures plummet by more than £53bn in 2020 – with more to come from collapsed Christmas trading – new research from CGA has found.

Produced in tandem with sector trade body UKHospitality, CGA’s Survival to Revival report, the eighth edition of its Future Shock series, revealed a £53.3bn year-on-year drop sales drop between the start of April and the end of September.

What’s more, it revealed both falling consumer and business confidence, with 78% of British adults concerned about the long-term financial implications of the pandemic, and 27% of busines leaders of multi-site groups predicting they will be unviable by mid-2021 with current levels of support.

Additionally, the report – published before the announcement of tier four on 19 December – forecast bleak Christmas trading while 98% of England’s licensed premises in severely restricted Tier 2 and 3 areas.

Hitting pubs hard

News of a massive sector-wide sales slump in 2020 comes after new data from pay-at-table app OrderPay revealed that pub sales of at least £2.6bn will be lost during December under the latest raft of Government-mandated trading restrictions and business closures.

“We know that the festive period is usually the busiest time of year for pubs as people come together to socialise and celebrate,” Richard Carter, co-founder of OrderPay, said.

“But this year things are very different and it’s clear from our data that the restrictions are hitting pubs hard and resulting in a staggering amount of lost sales - for individual operators and across the industry as a whole.”

On top of this, the British Beer & Pub Association also predicted that beer sales in pubs are expected to be 90% lower than ‘normal’ over the festive period – a drop of 270m pints.

Long road to recovery

Karl Chessell, business unit director, retail and food at CGA, described 2020 as “the most difficult year in hospitality that most of us have ever known” and highlighted its latest report as a chance to reflect on the “havoc” it has wrought.

“Sadly, there have already been many business casualties in our sector, and more will inevitably follow as a result of the onerous limits on trading and socialising at what should be the busiest time of the year,” he said.

“But among businesses that have been able to sustain themselves, the pandemic has instilled a resilience and innovation that will stand them in good stead for years to come.

“The road to recovery clearly has a long way to run yet but there is light at the end of the tunnel, and at some point in 2021 we can hope for a release in the pent-up demand for all the experiences that people love in hospitality.”

Kate Nicholls, chief executive at UKHospitality, added: “Undoubtedly, 2020 has been a disaster for the sector.

“Every aspect of hospitality in every corner of the UK has come under enormous pressure and we are by no means out of the woods.

“There is, though, every chance that with the right support businesses can begin to trade their way out of danger and towards some degree of prosperity next year.

“The roll-out of a vaccine should give us all confidence that the next year will be dramatically better than this one.”

Safer than retail?

However, the report also found that 95% of consumers have been satisfied with the level of hygiene they have found in hospitality venues this year with more than half (55%) saying they feel safer in hospitality venues than in retail.

This comes after research from global intelligence platform Streetbees in August found that more than eight-in-ten (85%) pubgoers believed their local was following Covid-19 secure Government guidance such as maintaining social distancing, collecting customer contact details and providing hand sanitiser where possible.

What’s more, Streetbees also found that 13% of respondents believed pubs and bars they’d visited since the easing of lockdown restrictions over the summer had adapted to guidance “very well” while a further 31% believed their local had done “well” in adapting their business for the new normal.

Related topics: Legislation

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