Sales boost for sector but costs continue to cripple
Managed groups in the sector were collectively 3.9% ahead for the month on like-for-like (lfl) sales versus last year, which marked the fifth month of growth in a row but is still lagging behind inflation, according to the latest Coffer CGA Business Tracker.
The tracker, which is produced by CGA by NIQ in partnership with The Coffer Group and RSM UK, showed the growth figure is substantially down from 10.1% in January and is well below the current rate of inflation in the UK.
Pubs performed the best of the tracker’s three market segments to continue a solid start to 2023, with like-for-like sales 6.9% ahead of February 2022. Restaurants achieved modest growth of 1.9% but the bars segment continued to struggle, with sales down 10.1%.
Capital gains
Continuing the pattern of recent months, sales in London outpaced the rest of the country in February with figures showing sales within the M25 were 7.6% ahead year-on-year, which was more than twice the growth of 3.1% outside London.
Karl Chessell, director - hospitality operators and food, EMEA at CGA by NIQ, said: “Hospitality trading is now consistently ahead year-on-year, and consumers’ appetite for pubs in particular remains undimmed.”
He added the sector can be optimistic due to demand when planning for the long term but the difficulty is the cost of doing business right now and the lack of energy support in the budget was disappointing.
“This risks the future of many businesses to survive this period of cost pressure and benefit from the positive demand that exists,” Chessell said.
Recession avoided
Coffer Corporate Leisure managing director Mark Sheehan said there is strong demand for the best sites in London and expects this to continue.
RSM UK head of leisure and hospitality Paul Newman said: “Although there were no meaningful sector-specific reliefs in last week’s Budget, news that the UK is likely to avoid a technical recession alongside a significant fall in inflation later this year should provide a boost to consumer confidence.
“Operators will be desperate for this mood swing to translate into an uplift in spending across the UK’s pubs and restaurants over the coming months as they continue to grapple with rampant food inflation and rocketing energy bills.”
