Extra £17bn needed to keep up with inflation
According to the latest UKH tracker, with data from CGA by NielsenIQ, Q3 sales for this year were 13% below where they should be in real terms to keep up with inflation.
UKH chief executive Kate Nicholls said: “These figures are a stark reminder of the challenge facing our sector.”
Perilous situation
The industry saw a 1.3% increase in turnover to £135bn in the year to the end of September 2022 compared with 2019, the first time a full-year figure has been above pre-Covid levels.
However, the slight year-on-year increase was wiped out by inflation as well as rising energy, food and labour costs, according to the data.
Nicholls added: “The sector’s sales finally rising above pre-pandemic levels should be a cause for celebration but the scale of inflation means it’s actually a warning sign of just how perilous a position hospitality is in.
“Catching up to these levels of inflation will be almost impossible for businesses, as they grapple with rising costs and dampening consumer confidence as a result of the cost-of-living crisis.”
Weather this storm
This comes as the latest Drinks Recovery Tracker from CGA by NielsenIQ showed drinks sales in managed venues were “substantially” behind vs 2019 levels despite being 15% ahead compared with last year.
But “on a more positive note”, the data showed hospitality businesses were “capable” of returning to pre-pandemic levels “even in these challenging circumstances”, Nicholls said.
She added: “The nation still hugely values the role [hospitality] plays in our culture and society.
“That demonstrates the importance of hospitality maintaining its inclusion in the Government’s energy relief package post-April to help it weather this storm, in order to deliver the economic growth I’m confident it can achieve.”
