Business leaders’ confidence declines amid increasing cost rises

CGA by NIQ’s recent Business Confidence Survey showed around 41% of leaders felt confident about future prospects for their business over the next 12 months.

This showed a dip of eight percentage points from August, which held a figure of 49%.

Contrastingly, it also represented only 20% of leaders felt optimistic about the future of hospitality in general over the next year – a significantly decreased figure from three months prior, where 36% shared this view.

Optimism is recorded to be at its lowest point since October 2022, where inflation was reached a 40-year high.

Tough trading conditions

CGA by NIQ director of hospitality operators and food EMEA Karl Chessell said: “These numbers highlight the increasing polarisation of hospitality this year—between both consumers spending more or less, and leaders feeling optimistic or pessimistic.” He added: “CGA’s research elsewhere shows some managed restaurant, pub and bar groups continue to grow sales and open new sites, but for many others this has been another challenging year.”

Chessell explain that the recent Budget announcements​, revealed by Chancellor Rachel Reeves’ had fallen short in terms of levels of support business leaders hoped to see. He said: “The increase in national insurance contributions will put even more operations at risk of failure.”

Chessell explained in light of Christmas, trading may increase however longer-term optimism he believed was likely to remain “very restrained well into 2025”.

The increasingly negative segment, according to the survey results, followed tough trading conditions in the third quarter of 2024.

Fewer drink purchases

The poll showed the amount of leaders discovering a year-on-year increase in revenue has fallen 64% to 41%.

This has reportedly been the result of large amounts of consumers choosing to cut spending.

Some 65% of leaders also revealed their guest footfall has decreased year-on-year.

Meanwhile, close to half (46%) agreed they were pessimistic about the next 12 months. More than one in two (54%) of leaders also noted visitors were buying fewer drinks, with only 10%​ observing an increase in their purchases.

Sharing similar views, 82% of operators within the hospitality industry admitted they feared for the future of pubs following Budget announcements​.

With many concerned about the stability of their businesses. The survey revealed the full extent of costs currently faced by the hospitality industry.

The research was conducted before the Budget and showed both reform of business rates, VAT, and restraint on increases in national living wage alongside employers’ national insurance, were business leaders’ top four priorities they wished Government to focus on.