The latest Business Confidence Survey from NIQ, by CGA and Zonal, shows 51% of leaders feel confident about their business prospects over the next 12 months, up from a five-year low of 26% in October 2025.
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Confidence in the sector more broadly has also recovered, rising from 13% to 31%, though both measures remain below pre-pandemic levels.
The rebound follows a strong festive trading period, with two thirds (66%) of leaders reporting year-on-year revenue growth in the fourth quarter, up 20% on the previous quarter. More than two fifths (43%) recorded higher profits, while 30% saw a decline.
However, rising costs continue to dampen optimism across the sector. 88% of leaders said employment costs are a concern for 2026, while 73% flagged food and drink inflation and 71% cited business rates.
Growing divide
The survey highlights a widening divide between larger operators and independents. Just 16% of independent leaders said they feel confident about their prospects, and only 24% of single-site operators reported revenue growth in 2025.
By contrast, 61% of leaders at businesses with five or more sites recorded revenue growth, with nearly two thirds (63%) planning to expand their estate over the next 12 months.
Operators are continuing to invest despite pressures, with spending on site refurbishments, operational efficiencies and menu development all increasing after cutbacks in 2025. Technology remains a key focus, with AI tools, loyalty platforms and CRM systems among the most common areas of investment.
At the same time, cost pressures are forcing difficult operational decisions. Half (50%) of leaders said being short-staffed has become “the new normal”, with many reducing team sizes or hours to offset rising employment costs.
‘A welcome sign’
Karl Chessell, director – hospitality operators and food, EMEA at NIQ, said: “An uptick in confidence after a strong Christmas is a very welcome sign of hospitality’s resilience in the face of relentless challenges.
“However, there is still widespread uncertainty about prospects, and while it’s great to see managed groups increasingly bullish about new openings there are alarming signs of stress among smaller businesses.”
Tim Chapman, chief commercial officer at Zonal, added that while conditions remain challenging, operators are showing resilience and continuing to prioritise investment in technology to improve efficiency and meet customer expectations.
