The latest Business Confidence Survey from NIQ and Zonal found 53% of hospitality leaders were optimistic about their business prospects over the next 12 months, up from 37% at the end of Q2 2026.
Join our new WhatsApp channel: The Morning Round-Up
Get the biggest pub trade stories straight to your phone. Listen to our one-minute daily news briefing and receive breaking news, exclusives and sector updates throughout the day. Remember to turn notifications on in the top right corner! Join the channel here.
It marked the tracker’s highest point since early 2024, while optimism about the future of hospitality as a whole rose by seven percentage points to 28%.
However, the recovery remains fragile, with just 11% of independent businesses feeling hopeful about their prospects over the next year – the lowest level since the Covid-19 pandemic.
The findings come ahead of the Budget on Wednesday 28 October, with a VAT reduction for hospitality as cited as operator’s most sought-after form of Government support.
Cuts to National Insurance contributions and extended support on business rates were also identified as a priority
Revenue and profits improve
The rise in confidence follows a stronger summer and early autumn, with the men’s football World Cup and good weather boosting footfall.
Some 84% of businesses increased or maintained revenue year-on-year in the third quarter, according to the figures, the highest proportion for more than two years.
It means the tracker has recorded five consecutive months of like-for-like sales growth at Britain’s managed groups.
More than half (57%) of leaders said profits were better than or in line with last year’s performance, while just 5% described their business as loss-making or unviable.
Despite the improved trading figures, rising costs continue to put pressure on margins.
Two thirds (68%) of leaders reported increases in gas and electricity prices over the previous three months, while 84% were concerned about inflation in food and drink.
The survey also found 58% of leaders were concerned about interest rates over the next 12 months, with 34% worried about investor confidence.
Four in five (80%) also believed the UK business environment was not currently welcoming to new investment, while 76% viewed the tax burden as a major barrier.
Budget support needed
More than half of leaders said cuts to VAT and National Insurance contributions would improve their resilience and enable greater spending on premises and job creation, particularly for young people.
NIQ director of hospitality operators and food, EMEA, Karl Chessell, said the third quarter had brought a welcome improvement after a difficult start to 2026.
“With sales and profits moving in the right direction, businesses will now be cautiously optimistic about trading in the crucial run-in to Christmas and New Year,” he said.
However, Chessell warned the sector could not afford to become complacent, with business confidence and sales growth still below pre-Covid levels.
He continued: “This makes the imminent Budget the most consequential in many years. With the right support on VAT, rates and labour costs, this can be the start of a new period of investment and job creation in hospitality.”
Zonal chief commercial officer Tim Chapman added the stronger third quarter was encouraging, with operators benefiting from increased footfall and improved trading conditions.
He said the recent uplift in sales and profitability demonstrated hospitality’s continuing importance to the wider economy, but warned smaller operators continued to face significant pressures.
Chapman added: “The impending Budget will be crucial in sustaining positive momentum and allowing operators to continue to invest in their people, venues and guest experiences.”
