Venues rise prices by 7.1% to offset soaring costs

05-Feb-2024 - Last updated on 05-Feb-2024 at 10:25 GMT

Turbulent economic period: venues rise prices by 7.1% to combat inflationary pressures and staff shortages (Credit: Getty/NickyLloyd)

Hospitality venues increased prices by an average of 7.1% in the year to December 2023 after being left with “little choice” in the face of rising costs and staff shortages.

New data from Fourth showed despite “strong” festive trading across the industry, high food inflation and staffing issues had resulted in many businesses “struggling to stay afloat”.

Pulled from a database of more than 700 companies across the sector, the figures revealed trade was up 10.5% in December 2023 compared to the same period in 2022, with net sales revenue growth of 6.1%.

While restaurants saw a 2.9% upswing in trade during the 12-months to November 2023, sales revenue in pubs saw a 6.7% downturn during this period, attributed to rising food costs and staff shortages.

Fourth managing director EMEA Sebastien Sepierre said: “With the festive trading period being a crucial time for hospitality, it’s fantastic to see such a significant growth in sales compared to 2022.

Turbulent economic period

“These figures can hopefully provide operators with a sense of cautious optimism as we head into 2024.

“However, the high cost of doing business across the sector continues to be a major concern for operators, who are looking to control costs in an effort to remain profitable during this turbulent economic period.”

On top of food inflation sitting at 15% in November last year, according to the latest figures from CGA by NIQ, staff headcount continued “trending down” across hospitality, having fallen -2% in Q4 2023 compared to Q4 2022.

For pubs, staffing levels were down by 6% between December 2022 and December 2023, while the number of restaurant workers fell by 2.5%.

The proportion of new starters also fell significantly sector-wide during this period, dropping 30% in November 2023 versus the previous year.

Boost productivity

In addition, the average number of hours worked also dropped, with pubs and restaurants seeing a 0.8% and 3.7% decline respectively.

While the festive period typically represents a busy time for recruitment, these figures “reflect the increased costs of doing business”, as operators are reluctant to hire more staff for fear of further eating into their bottom lines, according to Fourth.

However, weekday trading levels grew across the hospitality sector in Q4 2023, with Monday to Thursday sales revenue growing by 4.5% compared to Q4 2022 while weekend sales grew 1.5%.

Sepierre added: “In order to maintain margins, it’s essential businesses find solutions that will help them to drive efficiencies with labour costs and maximise productivity using leaner teams.

“Workforce management technology is a crucial tool to help manage costs, forecast demand and boost productivity, which in turn gives operators the ability to focus on ensuring first class customer experiences.”