Like-for-like sales last month across Britain’s leading managed pub, bar and restaurant groups were up by 3.7% year-on-year, according to the new Coffer CGA Business Tracker.
The monitor was also ahead of pre-pandemic comparatives for the tenth month in a row, recording like-for-like growth of 5.0% on November 2019. However, with inflation running at more than 11%, hospitality sales are significantly down in real terms.
The start of the World Cup delivered a strong November for pubs, where sales rose by 8.1%. The distraction of the tournament and pressure on discretionary spending made it a much more difficult month for the managed restaurant sector, where like-for-like sales slipped 0.8% from November 2021. Sales in the bars segment were down 8.6%.
The Tracker also indicates that London’s hospitality sector continues to bounce back from the upheaval of Covid. November sales within the M25 grew by 6.2% year-on-year – twice the rate of 3.0%outside the M25.
Paul Newman, head of leisure and hospitality at RSM UK, commented: “The festive trading period is when most hospitality businesses make the majority of their annual profits. With last year’s festivities severely impacted, 2022 needs to deliver if the sector is to avoid a grim start to 2023.
“The World Cup is providing some welcome respite as fans come together to celebrate in their local pubs, but industrial unrest alongside fragile consumer confidence will only add to restaurant operators’ woes and could leave a number of under-capitalised businesses teetering on the edge as New Year approaches.”
Karl Chessell, director at hospitality operators and food, EMEA at CGA, added: “It was a positive November for pubs screening World Cup matches, and another strong month for London as workers and visitors continue to return to the capital, especially ahead of the festive season.
“But with restaurants and bars trading way behind the rate of inflation, consumer spending under strain and rail strikes threatening festive footfall, it will be a challenging December for managed groups. Spiralling costs leave many hospitality businesses extremely fragile, and with little respite in sight there is a strong case for urgent and targeted government support to protect businesses and jobs.”
Meanwhile, David Coffer, Chairman of The Coffer Group, said: “On the face of it, these figures are very promising, especially in relation to turnover, but the consumer price index figures obviously counter this progress dramatically, as well as the deterioration of turnover because of a wide range of industrial actions – in particular, those relating to trains and local transport.
“With the impending strikes over the festive period there will certainly be further sector trading damage, but it is hoped that there will be extensive intolerance and resistance from the public wishing to seasonally celebrate for the first time in 3 years. It is hoped that this will see a dilution of the effect that is feared.”
NAM Implications:
- Despite the massive inflationary impact on retail price rises…
- …the fact remains that consumers are not gaining equivalent rises in income…
- …so demand will be depressed throughout 2023.
- With any growth coming at the expense of rivals.
- Big companies in trouble financially will be absorbed by more successful rivals with smaller players the main casualties.
- As night follows day…
