Rising optimism across hospitality businesses
The Business Confidence Survey from CGA and Fourth found 44% of business leaders are optimistic about the prospects of the sector over the next 12 months – up almost a third (30%) in the previous survey three months ago and is the highest point since May 2018.
Operators’ confidence about the prospects of their own businesses has also increased quarter-on-quarter by six percentage points to 64%.
However, while optimism has improved, it is still significantly lower than levels recorded before the EU Referendum in 2016.
Further concerns
Leaders are still nervous about consumer footfall and spending in 2020 with just over half (53%) thinking consumers will eat and drink out less often in the next six months, and just a quarter (25%) anticipate a rise in average spend, with almost a third (32%) predicting spend to drop. The poll identifies further concerns about rising people, property and food costs.
CGA group chief executive Phil Tate said: “After a tough 2019 for many out-of-home eating and drinking businesses, the signs of cautious optimism in this survey are very welcome.
“The sector still faces a host of challenges – many of which, like increased costs, are out of their control. But this is a resilient and innovative industry, and even during testing times there are big opportunities for operators with the right concept with the right price and the right consumer focus.
“If businesses can get some economic stability and the right support from Government, there’s a lot to look forward to in 2020.”
Industry investment
Fourth chief operating officer Simon Bocca hailed the rise in optimism as encouraging and predicted this will gather momentum with a “pro-business election result”.
He said: “This has the potential to unlock industry investment and a corresponding uptick in consumer confidence. However, it is clear there are three Ps that remain front of mind for our business leaders – people, profit and politics.
“With people, the market is absolutely unified in the sense the best teams will make the difference and those businesses that can attract, keep, engage and train the right people to deliver the right guest experience every time are best placed to win.
“In terms of profitability, the rising tide of cost inflation across every line of the profit and loss, notably for workforce, goods and property, keeps coming and the industry is waging a war to defend and grow profitability, daily.
“As for politics, while a confidence bounce from the election is encouraging, the industry will be mindful of the road bumps ahead, knowing Brexit and 2020 will bring opportunities and challenges in equal measures.”
