Sales lag despite best December in 3 years
According to the latest Coffer CGA Business Tracker, Britain’s leading managed pub, bar and restaurant groups like-for-like December sales were 15% ahead of December 2021 when festive trading was hit by the Omicron variant of Covid. However, sales were only 2% ahead of December 2019, and after adjustments for double-digit inflation, they are significantly behind.
The tracker – produced by CGA by NielsenIQ in partnership with The Coffer Group and RSM UK – showed this festive period was particularly strong for pubs, where like-for-like sales finished 19% ahead of December 2021 as concerns about Covid eased and the football World Cup drove fans into venues. Year-on-year growth was more modest in restaurants at 9.1% while sales in the bars segment were up 11.9%.
London recovery
London has also continued its recovery with sales within the M25 being 22.8% ahead of 2021 while outside the area, sales were up 12.9% year-on-year.
Karl Chessell, director - hospitality operators and food, EMEA at CGA by NielsenIQ, said: “After two bleak Decembers, solid Christmas trading helped many pub, bar and restaurant groups to end 2022 on a high.
“However, it is clear sales remain well behind pre-Covid levels in real terms, and fragile consumer confidence and rail strikes made for tough trading conditions.
“With the costs of energy, food and other key costs continuing to soar, operators’ sales and profit margins are under severe pressure as we move into 2023, and with venues weakened by nearly three years of disruption, targeted Government support is urgently needed to protect businesses and jobs.”
Solid despite disruptions
Coffer Corporate Leisure managing director Mark Sheehan added: “Train strikes affected trade on key days in December but despite disruptions business was solid and many operators, especially pubs and bars traded better than expected.”
RSM UK head of leisure and hospitality Paul Newman said: “The headwinds facing the leisure and hospitality sector show little immediate signs of abating as consumer budgets are tightened further while the cost of energy, borrowing and labour remain elevated.
“The first quarter of the year is always challenging in terms of cash flow, with significant rent and VAT outflows due at the end of March and April seeing the end of energy support and the start of Covid loan repayments.
“These factors will undoubtedly lead to more restructurings, providing consolidation opportunities for well-funded operators to capture market share from faltering rivals.”
