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Inflation dampens hospitality growth

Published:  22 April, 2022

Hospitality’s recovery from Covid remains “fragile”, new data has shown, as solid growth for Britain’s managed restaurant, pub and bar groups in March was dampened by high inflation.

New data from the Coffer CGA Business Tracker has revealed that pub and bar groups achieved solid growth from pre-Covid-19 levels in March this year, but with high inflation hitting both margins and spending.

Groups’ like-for-like sales in March 2022 were 4% higher than in March 2019, marking a gradual upturn since the start of the year. Like-for-like sales dropped by 1% in January and saw 3% growth in February.

“Two years on from the start of the pandemic and unprecedented turmoil in hospitality, these figures show managed groups are building back steadily,” Karl Chessell, director of hospitality operators and food, EMEA at CGA, said.

“It’s particularly pleasing to see bars performing so well, as people return to late-night visits. However, like-for-like figures are well below inflation, and with soaring costs in energy, food and other areas hurting both operators and consumers, real-terms growth will be extremely challenging for some time.”

Bars performed the strongest of the Tracker’s three sectors in March, with like-for-like sales growth of 8%, as consumers continue to seek high tempo and experiential visits. Restaurants were close behind with 6% growth, thanks in large part to flourishing delivery sales, while pubs were up 2%.

Trading in London continues to lag well behind other parts of the country. Managed groups’ like-for-like sales inside the M25 in March were flat, compared to 6% growth beyond the M25.

“Whilst restaurant and bar sales are continuing to increase, these numbers are well below inflation,” Mark Sheehan, MD at Coffer Corporate Leisure, added.

“After a long challenging period for operators the recovery is slow and the challenges faced by the sector are wide. These numbers are improving though and returning workers and tourists in increasing numbers should help lift London over the coming months.”

CGA collected sales figures directly from 59 companies for the March edition of the Coffer CGA Business Tracker.

These include some of the biggest names in the business, with Big Table Group (Bella Italia, Las Iguanas), Boparan Restaurant Group (Carluccio’s, Gourmet Burger Kitchen), Bill’s Restaurants, BrewDog, Gaucho Grill, Giggling Squid, Greene King (Chef & Brewer, Hungry Horse, Flaming Grill), Mitchells & Butlers, New World Trading Company, St Austell and Whitbread all contributing.