The latest Hospitality Business Tracker from NIQ RSM showed Britain’s leading managed hospitality groups achieved like-for-like growth of 0.9% in March.
While this was a stronger performance than January and February, it is still well below the most recent rate of inflation, which stood at 3.3% in March according to the Office for National Statistics (ONS).
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The Tracker - produced by NIQ and powered by CGA intelligence in association with RSM -showed restaurants’ sales were 2.5% ahead of March 2025, a welcome sign of consumers’ readiness to eat out, especially on big occasions like Mother’s Day.
However, pub groups fell behind, achieving like-for-like growth of only 0.2% last month, despite a boost from St Patrick’s Day celebrations, as ongoing economic headwinds continued to put pressure on margins.
It marked the first time restaurants have outpaced pubs for growth for 16 months. Managed bars saw trading fall by 2.6% year-on-year, while there was marginal growth of 0.9% in the on-the-go segment.
Welcome development
Regionally, the figures showed a slightly better March for operators in London, with like-for-like sales up 0.4% within the M25 and by 1.1% further afield.
NIQ director for hospitality operators and food EMEA, Karl Chessell, said: “Restaurants’ move back into the black in March is a welcome development after a very challenging start to the year.
“Nevertheless, many groups remain reliant on new openings and deliveries for real-terms growth, and geopolitical concerns are casting a long shadow over the months ahead.
“Hospitality faces relentless challenges that are not of its own making, and without targeted government support it is likely to be a challenging summer season.”
The Tracker also indicated the continued cautious expansion of managed groups. On a total sales basis, including at venues launched by hospitality groups in the last 12 months, sales rose 4.3% - just ahead of inflation.
NIQ’s recent Business Confidence Survey with Zonal found nearly two thirds (63%) of leaders of groups with five or more sites planned to increase their estate over the next 12 months.
Despite openings and real-terms growth, hospitality remains overwhelmed by high costs in key inputs like food, drink and labour.
Renewed fears
There are also fears of renewed inflation as a result of ongoing uncertainty in the Middle East, which is likely to push up prices in many energy-related areas.
Conducted before the start of the conflict, the Business Confidence Survey also found fewer than a third (31%) of leaders were optimistic about the future of hospitality over the next 12 months.
RSM UK head of leisure and hospitality Saxon Moseley added: “Sluggish like-for-like growth across the sector masks a change in fortunes for Britain’s eateries, with restaurants returning to growth at the expense of food-led pubs.
“However, the bigger picture suggests consumer spending has not increased significantly but is instead shifting between different segments of the market, highlighting the degree of competition amongst operators.
“The data also shows overall revenue growth is being driven by new openings rather than underlying like-for-like performance, favouring larger operators with the capital to expand, while many independent businesses continue to grapple with underwhelming site revenue growth alongside rising cost pressures.
“With new entrants vital to the evolution of the hospitality sector, creating the right conditions for businesses of all sizes to grow is critical to maintaining a diverse and resilient hospitality industry.”
