November sales up but Omicron threatens future of fragile businesses

The tracker, produced by CGA in partnership with The Coffer Group and RSM, showed November was the fourth month in a row 2021 sales have exceeded 2019 levels; however, the rate has dropped from 8% in September and 3% in October.

CGA director for hospitality operators and food, EMEA, Karl Chessell said: “November’s sales figures demonstrate the resilience of managed groups in the face of ferocious headwinds.

“They have battled hard to shore up sales ever since their venues reopened in the Spring, but the new coronavirus variant adds yet another threat to trading in the most important month of the year.

New restrictions a potential threat 

“The next few weeks will be crucial to give hospitality some momentum for growth in 2022, but new restrictions may threaten the future of thousands of fragile businesses and jobs.”

However, rising costs in food, drink, energy, and other key inputs have put operators’ margins under strain ahead of the most important trading period of the year, while supply issues, staff shortages and concerns around the impact of ‘Plan B’ restrictions announced by the Government this week, have added to their challenges.
 
RSM head of leisure and hospitality Paul Newman said: “November continues the recent downward trajectory of sales growth compared to 2019, falling to 2% in November vs 8% in September, as cancellations due to Omicron trepidation start to hit the sales of many hospitality businesses.

“As we head into final preparations for the holiday season, it’s unclear how the new COVID-19 variant and further restrictions will impact socialising and consumer confidence.

Hope for a stronger 2022

“Operators will be desperately hoping that Brits go ahead with plans to celebrate over the festive season with friends and family in their local hostelry to close out such a challenging year on a more positive note.”

Also highlighted in the November tracker, which collected sales data from 60 companies, was total sales in London had dipped by 2% but outside the M25 they rose by 4%, suggesting the capital is still suffering from an absence of office workers and domestic and international visitors.

Coffer Corporate Leisure managing director Mark Sheehan said: “This is a fragile recovery, November’s sales were relatively strong, but the current uncertainty is going to hit Christmas badly.

“However, the outlook is much brighter and despite some bumps in the road we expect a strong 2022.”