Business leaders’ confidence plummeting

The October Business Confidence Survey ​from CGA by NielsenIQ and Fourth revealed only 8% of multi-site business leaders felt confident about the next 12 months for the overall eating and drinking out market.

This is a sharp fall from the last survey June when that percentage was at almost a quarter (23%) however, this was a steep drop from March when it was at 65%.

Furthermore, the research also found almost a three in 10 (29%) of those surveyed were confident about their own business prospects for the next year, which the research stated reflected the greater resilience of multi-site firms than independents, which have borne the brunt of closures recently.

However, this was also a drop from more than half (53%) in the last Business Confidence Survey​.

Remarkable resilience

Meanwhile, the latest research also showed the large majority (86%) of participants reported significant inflation in energy and food with challenges being deepened by a shortage of staff​ in the sector as 11% of roles are currently vacant.

While 80% of leaders said their businesses were still operating at a profit, 53% reported margins were lower than they were pre-pandemic.

Some 13% of those in the survey expected their businesses to either be running at a loss or unviable by the end of this calendar year.

This echoed research by a number of trade bodies, which found 35% of hospitality firms were at risk of going bust in the next eight weeks. ​

CGA director of hospitality operators and food EMEA Karl Chessell said businesses had showed “remarkable resilience” since the pandemic started.

Greatest challenges

He added: “But these figures show they are facing their greatest challenges yet. With no sign of relief on inflationary pressures for firms and consumers alike, sales and margins will be under severe strain and thousands of companies are now vulnerable.

“Political upheaval and market shocks have only made things worse and urgent and targeted Government support is needed to sustain the sector through this very difficult period.”

The state of the hospitality landscape was described as delicate, as highlighted in the survey, according to Fourth managing director EMEA Sebastien Sepierre.

He said: “Sector businesses are currently facing myriad challenges including 40-year high inflation, spiralling energy costs, instability in the markets and an understandably cautious consumer base.

“Wider support is needed now as without it, sector confidence will remain low and much of the industry will simply be unable to weather the storm in the months ahead.”