Just under half (49%) of business leaders were confident about prospects for their business over the next 12 months, according to CGA by NIQ’s latest Business Confidence Survey.
This figure was down four percentage points from May (53%) and a third consecutive quarter-on-quarter drop.
Moreover, more than a third (36%) felt optimistic about the prospects for hospitality in general over the next year.
This was up slightly (two percentage points) but below (by nine percentage points) the level of August 2023.
Confidence impact
However, confidence has been impacted by several years of high inflation and challenges in several areas.
This was especially the case for labour where 58% had seen significant increases in wage costs in the past 12 months while three quarter (75%) had seen at least some increases in food costs.
But, the survey showed glimmers of optimism as half (50%) of leaders reported a reduction in energy bills over the past year and 56% had not seen any further rises in renting costs.
Some 9% thought their business was a risk of failure in the next year while the number trading at a loss fell by five percentage points year on year to 9%.
Separate research from CGA by NIQ last month (August), showed the sector recorded quarter-on-quarter growth in outlet numbers.
Optimistic for the future
Elsewhere, operators were asked their thoughts on policy changes to help growth in the survey. It found 88% stated a business rates reform was a top priority while a targeted VAT reduction (67%) and more sustainable increases in the national living wage (52%) among other top concerns.
CGA by NIQ director Karl Chessell said: “After more than four years of disruption from Covid and inflation, hospitality leaders are understandably circumspect about the future.
“With pay and food costs still rising and many consumers still feeling the pinch on spending, it’s not surprising there has been no post-election bounce in optimism.
“However, long overdue respite in energy and rents will have loosened the squeeze on operators’ margins and we can be optimistic an easing of consumers’ costs will free up more spending in the final few months of 2024.
“Confidence will need to stay very cautious for some time to come but with the right support from the new Government, hospitality will be well-placed to power economic growth and create jobs.”
