‘Bumper Xmas trading doesn’t resolve ongoing challenges’
The latest CGA RSM Hospitality Business Tracker capped strong results for managed pubs, bars and restaurants in 2023 where there was like-for-like growth each month.
December was a sharp increase from the 4% in November and more than double the rate of inflation in the UK, as measured by the Consumer Price Index.
While pubs enjoyed a growth of almost a tenth, restaurants benefitted from an 8.3% upswing while bars bounced back from a long run of negative figures with growth of 5.6%.
For the 12th time in the past 13 months, growth in the capital was higher than elsewhere. Groups’ sales within the M25 in the last month of 2023 were up more than a tenth (11.2%) from the previous year whereas outside of the motorway, sales were up 8.1%.
Bumper Christmas
RSM UK head of leisure and hospitality Paul Newman said: “London’s pubs and restaurants emerge as clear winners when it comes to festive trade for 2023.
“In 2022, train strikes sucked demand out of the sector and these like-for-like sales numbers are reflective of the first proper Christmas for operators post Covid.
“Restaurants inside the M25 enjoyed like-for-like growth of 11.8% with pubs not far behind at 11.5%. Outside the capital, sales growth for restaurants was positive but more subdued with like for likes up 8%.
“A bumper Christmas doesn’t resolve ongoing challenges for the sector, particularly for smaller independent operators as they struggle to cope with the growing cost of borrowing, energy bills and ingredients.
“The first quarter is always a particularly acute time for the hospitality sector with lower footfall, quarterly rent payments and higher VAT bills, which have already been blamed for the closure of several high-profile restaurants.
“To have navigated the market post-Covid only to fail now is heart-wrenching for these owners and further casualties look inevitable in national living wages and business rates from April makes more businesses unviable.”
Enduring appeal
Last month’s tracker figures highlight the enduring appeal of pubs, bars and restaurants over the festive season, according to CGA hospitality operators and food EMEA director Karl Chessell.
He added: “They are a welcome sign pressure on consumers’ spending may be easing and the extra revenue is vital to groups as we enter quieter trading months.
“However, cost and labour issues mean some businesses remain under severe pressure. All operators will need to stay resolutely focused on the fundamentals of great hospitality in order to sustain real-terms growth throughout 2024.”
