The latest Business Confidence Survey from NIQ and Zonal found 35% of leaders were optimistic about prospects for their own business over the next 12 months.
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This was down two percentage points from the previous survey in May and 16 percentage points lower than at the start of 2026.
Confidence in the future of hospitality more broadly remained low, with just 21% of leaders optimistic about the sector’s prospects.
Footfall squeeze
The research showed 41% of leaders said footfall had declined recently, compared with 34% who reported an increase.
NIQ and Zonal said the World Cup had benefited pubs screening matches, but had been less helpful for restaurants and other venues not showing games.
Only 41% of leaders said quarterly revenue had increased year on year, despite price rises across many venues. Just over half, 52%, said profitability had either fallen, or that their business was currently running at a loss or was unviable.
The pressure was particularly acute for independents, with only 16% of single site operators optimistic about the prospects for their business over the next year.
‘Relentless challenges’
The survey found employment costs had risen by an average of 10.7% per person over the past two years, with 85% of leaders concerned about higher labour costs, while 85% also said their electricity, gas or oil prices had increased in the past three months.
Food and drink inflation was cited as a concern by 69% of leaders, while 67% were concerned about VAT.
Karl Chessell, director, hospitality operators and food, EMEA at NIQ, said: “The World Cup and hot weather should have boosted hospitality this summer, but any benefits have been outweighed by relentless challenges.
“Falling visits and rising costs are a hugely damaging combination and it is no surprise to see that leaders’ confidence is running so low, especially among smaller businesses.”
Government support
The findings come after the Government announced business rates relief for pubs, clubs and live music venues in July, and today (2 September), unveiled the launch of a £10m Hospitality Grant Scheme to support independent pubs, restaurants and cafés.
The survey found 47% of leaders were optimistic the new Government leadership would benefit hospitality, while 26% were pessimistic.
Chessell said the forthcoming October Budget could be a “lifeline” for thousands of hospitality businesses and jobs, with VAT, rates, National Insurance and alcohol duty among the levers available to Government.
Zonal chief commercial officer Tim Chapman said operators were still investing where possible, including in estates, teams, technology and guest experience.
He added: “There’s no hiding from the fact that confidence in the sector is flat at best. Recent Government moves, however, such as business rates relief, are creating some optimism as we look to the rest of 2026 and beyond.”
