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Managed restaurants optimistic ahead of crucial Christmas
The UK’s leading hospitality groups achieved 4% year-on-year sales growth in November, raising hopes that consumers are ready to splash the cash this Christmas.
Christmas 2023 will be a vital one for a beleaguered hospitality sector – between Covid-19, rail strikes and the cost-of-living crisis, recent winters have proven cruel for pubs, bars and restaurants.
According to the new CGA RSM Hospitality Business Tracker, managed hospitality businesses overall have enjoyed 14 months in a row of like-for-like sales growth, with the November figure of 4% a notable increase on the October year-on-year growth figure of 3.2% (the 4% figure is also close to the current inflation rate, as measured by the Consumer Price Index).
However, this improvement is not evenly spread.
Pubs have done particularly well, with like-for-like sales last month 5% ahead of November 2022, and restaurants were close behind at 4.9%. However, bar sales were down by a staggering 6.9%, continuing what has been a pretty dire year for the sector – this may partly be because drinks from bars are often more expensive than those at other venues, and Brits are cutting their spending as inflation bites. That noted, cocktails remain the drink of choice at “high tempo” festive occasions, according to CGA research.
There was also a notable geographical split, with sales at manages pubs, bars and restaurants within the M25 up by 3.5% last month, as opposed to 4.2% outside of the M25 – marking the first time this year that sales have been slower in London than the rest of the country.
Despite some disparity in the improvement, CGA by NIQ’s EMEA director for hospitality operators and food Karl Chessell suggested that the overall picture should fill operators with festive cheer: “November’s solid growth raises hopes that consumers are starting to spend a little more freely, and that hospitality might move into consistent real-terms growth in 2024. However, with the sector still besieged by relentlessly high costs, conditions will stay challenging for some time to come. Christmas trading can make the difference between a modest year and a good one, so all businesses will be hoping that consumers’ celebratory mood translates into confident spending on eating and drinking out.”
Paul Newman, head of leisure and hospitality at RSM UK, also noted that the 2023 figures are especially impressive given the boost provided by the 2022 FIFA World Cup.
Among the business to participate in the tracker was pub group Fuller’s, which has seen a significant increase in the number of Christmas bookings.
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