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Managed groups' like-for-like sales flat in May as cost crisis deepens

The result from May’s tracker follows like-for-like growth between 2% and 4% from February to April. 

However, given high inflation levels since 2019, sales are significantly behind pre-pandemic levels in real terms.

• READ MORE: 'Chronic' staff crisis continues as vacancy gap widens
  

Karl Chessell, director of hospitality operators and food at CGA, said: “Managed restaurants, pubs and bars have shown impressive resilience since the start of the pandemic, and their appeal remains strong.”

He added, “However, rising costs in many areas are tightening the squeeze on both operators’ profit margins and consumers’ discretionary spending. These all highlight that several challenges will remain for the rest of 2022.”

Restaurants recorded growth of 2% in May, while pubs were 1% down and bars were flat, the tracker has revealed.

Trading in London improved in May, with like-for-like sales flat within the M25 as more workers and tourists returned to the capital. However, sales outside the M25, well ahead of London for the first four months of the year, were also flat, a consequence of the cost of living crisis in many regions.

The tracker also highlights operators’ current reliance on delivery for sales growth. For example, dine-in-only sales were 3% lower than in May 2019.

Mark Sheehan, MD at Coffer Corporate Leisure, added: “May like-for-likes were flat, which with rising costs is a negative. June, however, should see a bounce with the Jubilee and warmer weather and operators are optimistic for strong sales across the summer. The focus, though, is on staffing and rising costs. The recruitment issues remain a critical problem for the hospitality sector.”

Paul Newman, head of leisure and hospitality at RSM UK, said: “It’s great to see London coming back to life with sales finally returning to a level not seen since the start of the pandemic, although the ability of operators to take advantage of this increased demand continues to be curtailed by significant staff shortages. 

“With inbound travel corridors now fully open and the Jubilee weekend providing a showcase for pageantry in all its glory, operators will hope that these results finally herald the start of a sustained recovery led by international tourists helping to offset subdued domestic demand.”

• CGA
• hospitality
• Covid-19
• Karl Chessell
• M25
• RSM UK
• Paul Newman
• Mark Sheehan
• Coffer Corporate Leisure