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Hospitality sales above pre-pandemic levels, but cost of living looms large

Published:  14 March, 2022

Britain’s managed restaurant, pub and bar groups raised sales above pre-pandemic levels in February, thanks mainly to the removal of Covid-19 restrictions. Still, high inflation continues to make real-terms growth challenging.

According to the latest Coffer CGA Business Tracker, like-for-like sales in February were 3% higher than in February 2019.

The figures look more impressive when compared to previous months. For example, comparative sales were 1% down in January this year, and December 2021 saw trading fall to 11% below December 2019 due to the Omicron variant.

Restaurants increased like-for-like sales by 9% in February, just outpacing the 7% growth for bars, which benefited from scrapping requirements for vaccination passes in late-night venues. However, pubs had a tougher month, ending down 1% on the pre-Covid-19 levels of February 2019.

While the growth figures are encouraging, they are depressed by inflationary pressures. Recent editions of the Consumer Prices Index have shown that inflation has run at 5-6% over the last 12 months alone.

Trading is also struggling to recover in London, the Coffer CGA Business Tracker shows. Managed groups’ like-for-like sales inside the M25 in February were 4% below February 2019, compared to growth of 6% beyond the M25.

Karl Chessell, director – hospitality operators and food, EMEA at CGA, said: “Delivery and late-night bars are particularly buoyant at the moment, and underlying demand for hospitality experiences remains strong. However, margins are being tightly squeezed by fast-rising costs, and the cost-of-living crisis is likely to dent consumer spending as the year goes on.”

Paul Newman, head of leisure and hospitality at RSM, added: “The return to offices as well as an uptick in sales from Valentine’s Day falling on a Monday – typically the most subdued trading day of the week – gave a welcome boost to the hospitality sector in February. Despite storms Eunice and Franklin, Brits were keen to make the most of their social plans following the easing of restrictions.”

CGA collected sales figures directly from 62 leading companies for the February edition of the Coffer CGA Business Tracker.