Dreary weather and disappointing consumer confidence have been cited as reasons for the current state of the hospitality industry.
In August 2024, Britain’s leading hospitality groups reported a modest year-on-year sales growth of 1.3%, as highlighted in the latest CGA RSM Hospitality Business Tracker.
Karl Chessell, director of hospitality operators and food for EMEA at CGA by NIQ, noted that these figures reflect a subdued summer for hospitality, with both weather conditions and consumer confidence contributing to a lack of real-term growth.
“While some bars and restaurants have struggled to maintain foot traffic, pubs have fared better, particularly due to the cooler temperatures affecting outdoor spaces. Consumers are eager to dine out, but operators hope that confidence will rise, encouraging more discretionary spending as we approach the critical final quarter of 2024,” explained Chessell.
Saxon Moseley, head of leisure and hospitality at RSM UK, emphasized the need for additional government support in the upcoming Autumn Budget. This includes reforms in business rates, a VAT reduction to align with European counterparts, and lowering employer national insurance contributions to help operators manage rising wage costs.
“Such measures could alleviate financial pressures on the hospitality sector and stimulate sales growth. Conversely, a ‘painful’ Budget could harm consumer confidence, leading to reduced discretionary spending and business investment, which would hinder recovery and intensify pressure ahead of the crucial festive trading season,” added Moseley.
The report indicated that hospitality groups have seen like-for-like sales increases in every month of 2024 except April. However, it marks the second consecutive month of below-inflation growth, with the Tracker exceeding 4% only once since the year’s onset. Total sales growth in August, which includes new venues opened in the last year, reached 3.7%.
Managed pubs outperformed the overall sector in August, with a 2.9% year-on-year growth despite the unfavorable weather. Restaurants experienced a 0.8% increase, while bars continued to decline, reporting a drop of 9.0%. The on-the-go segment achieved a 5.0% growth.
Sales within the M25 rose by 1.2% in August, while venues outside the capital slightly outperformed with 1.4% growth. This marks only the second instance this year where sales figures in London were weaker than those in the rest of the country.
