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On-trade optimism flies in face of uncertainties

Published:  16 December, 2019

Optimism among leaders in the on-trade has risen to its highest point for 18 months despite political and economic uncertainty. But senior executives remain wary of squeezed spending and rising costs, according to the latest Business Confidence Survey from CGA and Fourth.

The quarterly survey of business leaders across the UK pub, bar and restaurant market indicates that 44%, up from 30% in the last survey three months ago, are optimistic about prospects for the eating and drinking-out sector over the next 12 months, marking the highest point since May 2018.

Operators’ confidence about prospects for their own businesses has risen quarter on quarter too, by six percentage points to 64%.

However, while optimism has improved, it is still well below levels recorded by the survey before 2016’s EU referendum – an indication that uncertainty about Brexit continues to dampen the sector’s confidence.

After a tough 2019 for many out-of-home eating and drinking businesses, the signs of “cautious optimism” are “very welcome”, said Phil Tate, CEO of CGA.

“The sector still faces a host of challenges – many of which, like political uncertainty and increased costs, are out of their control. But this is a resilient and innovative industry, and even during testing times there are big opportunities for operators with the right concept at the right price and with the right consumer focus.”

If businesses can get some “economic stability and the right support from government”, there will be “a lot to look forward to in 2020”, he added.

Results for the CGA Fourth Business Confidence Survey, which is based on responses from around 130 leaders working at CEO, MD, chairman, director or other senior management level, was carried out in November 2019.