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Hospitality sales drop 48%

Published:  30 October, 2020

Sales in hospitality dropped by 48% in the third quarter of 2020, according to the latest Quarterly Tracker from UK Hospitality (UKH) and CGA.

This is a fall of £17bn on the same quarter in 2019, and £53.2bn less than the £133.5bn generated in 2019.

The huge drop in sales comes despite an injection of trade from the government’s Eat Out to Help Out promotion in August, with tough local lockdowns and falling consumer confidence having cut into sales again since the scheme came to an end. 

The dire figures highlighted the need for “extensive financial support” while restrictions remain in place, said Kate Nicholls, CEO of UKH.

“This is clearly dreadful news and made all the more desperate when combined with the expectation that Christmas will be, for many businesses, very bleak,” she said. 

Regional lockdowns and additional restrictions were also “beginning to bite businesses hard”, she added. 

“This highlights the need for clarity on the roadmap for businesses in Tier 2 and 3 regions. We need some idea of how businesses can plan to move out of the higher tiers, to give themselves a half chance of success. Otherwise, these awful figures are likely to be surpassed in Q4,” said Nicholls.

Phil Tate, group CEO of CGA, added: “The Tracker makes plain the seismic impact of Covid-19 and restrictions on hospitality. After sales were all but wiped out in the second quarter, a 48% fall in the third is not the recovery the sector was hoping for, in spite of the temporary boost from Eat Out to Help Out. 

“Hospitality’s sales are inextricably tied to government restrictions on trading and socialising, and every new measure deals another blow to operators and the supply chain. Businesses have responded to the pandemic with resilience and innovation, but they need proper, sustained support over what is going to be an extremely challenging winter.”

The figures from UKHospitality and CGA come ahead of the publication of new figures from the Office for National Statistics showing the latest impacts of the Covid-19 pandemic on the UK economy.

Compiled by CGA,  the Quarterly Tracker is based on its Trading Index and OPM data on food and drink sales across the on-trade. It is combined with hotel data supplied by STR, fast food market data supplied by NPD Group’s Crest Panel and direct company contributions, and is complemented with ONS statistics.

Earlier this month, new research estimated that hospitality faces 750,000 job losses without urgent government support.