The mixture picture for August has been highlighted in The Oxford Partnership’s latest Oxford Market Watch.
The report has highlighted that while people are staying in hospitality sites longer – up 12.5% year-on-year in the most recent four weeks – occupancy slipped, suggesting that although people are making more of each occasion, fewer customers are coming through the doors.
Sites in London and the south-east showed resilience, helped by tourism and a premium mix of venues, whereas Scotland endured the steepest outlet decline, down 3.0% year-to-date.
On spending, the divides are increasingly stark. The south-west led the way on drinks, with spend per head up by 13.7% year-to-date, and the West Midlands saw a short-term surge of 7.3% in the past four weeks.
Food sales drop in capital
Scotland also outperformed on food, up 16.7% in the year-to-date while, at the other end of the spectrum, Northern Ireland cut back sharply on drinks, dropping 5.7% (moving annual total), while the north-east recorded double-digit declines in food spend.
Even London saw softness in food with sales down 2.3% in the most recent four weeks, underlining the pressure on dining occasions.
Category performance continued to polarise with premium lager (up 1.7 percentage points (pp)) and world lager (up 3.9pp) both gaining share in the latest four weeks, with stout surging by 14.0pp. In contrast, core lager and world 4% lager styles both slipped by a combined 6.4pp and alongside ale (down 4.2%) and craft (down 6.7%) saw falls too.
Cider was mixed, slightly down in the short term but broadly stable across longer time-frames.
Boost from August bank holiday
The August bank holiday provided a lift for the trade, with sales up 3.4% on a typical summer weekend. Low & no alcohol (up 15.9%) and cider (up 10.1%) were the stand-out winners, while premium and world lagers also enjoyed strong uplifts, reflecting the willingness of consumers to spend more on key social occasions.
The Oxford Partnership CEO Alison Jordan said: “August really underlined the polarisation in our sector. People are staying out longer and increasingly choosing premium options when they do but that optimism is offset by a steady erosion of outlet numbers and uneven regional performance.
“The challenge for the trade is to balance value and premiumisation, keeping venues attractive for consumers under cost pressure while capitalising on occasions where people are willing to spend more.”
The Oxford Partnership stated the findings confirm hospitality is now navigating a two-speed market – one where growth lies in catering to premium choices and new drinking occasions while also tackling affordability challenges and the impact of ongoing closures.
