The research – produced by CGA by NielsenIQ in partnership with the Coffer Group and RSM UK – showed groups’ sales were ahead of pre-pandemic levels for the eighth month in a row, with like-for-like growth of 4.0% compared to September 2019.
Pubs were the strongest performing of the Tracker’s three hospitality segments in September, with year-on-year sales growth of 1.7%. Restaurants’ like-for-like sales were down by 7.9% on September 2021, and bars’ sales by 16.0%.
However, the dip from 12 months ago demonstrates the headwinds currently facing the hospitality sector—and with inflation as measured by the Consumer Prices Index at nearly 10%, sales are much further behind last year’s numbers in real terms.
Tough market
CGA hospitality operators and food director EMEA Karl Chessell said: “One year ago businesses and consumers were enjoying the end of Covid restrictions in restaurants, pubs and bars—but September’s dip in sales shows just how tough the market has become since then.
While hospitality had done well to bring trading back to pre-pandemic levels, soaring costs in fuel, food and other areas were “severely impacting” companies’ margins, Chessell added.
He believed high inflation was making real-terms growth extremely hard, and while the government’s capping of energy prices was welcome, more measures were needed to support businesses over what would be a challenging winter.
The Tracker has better news from the London market, as groups’ sales within the M25 rose 3.1% year-on-year.
This is due to the steady return of visitors and office workers to the capital over the year, as well as an influx of people visiting the capital after the death of Queen Elizabeth II. Beyond the M25, like-for-like sales were down by 4.5% from September 2021.
Back to trading
Coffer Corporate Leisure managing director Mark Sheehan said: Trade in the eating and drinking out sectors continues to improve on 2019 numbers albeit down on 2021 which reflected 'feel good' trading on the back of restrictions lifting.
“These numbers yet again demonstrate the challenges felt by the sector on the back of rising costs. It is the coming months that are most important to pubs, restaurants and bars in the face of worryingly weak consumer confidence.”
RSM UK head of leisure and hospitality Paul Newman commented: “With interest rates, labour, energy and costs of goods continuing to climb, pub and restaurant owners have a lot to think about as they finalise their menus for the all-important festive trading period.
“Consumer confidence remains low and with food and drink price inflation in hospitality reported to have hit 15% in August, operators will be juggling how best to protect their own margins without further denting fragile demand by passing on price rises.”
CGA by NielsenIQ collected sales figures directly from 74 leading companies for the latest edition of the Coffer CGA Business Tracker.
