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Business leaders in hospitality growing in confidence despite inflation

Published:  05 June, 2023

A new survey from CGA by NIQ and Fourth suggests hospitality leaders are feeling more positive about their businesses for the year ahead.

The quarterly poll shows more than half (54%) of leaders feel optimistic about prospects for their business over the next 12 months, an increase of seven percentage points from the January survey, and well over double the number (22%) who feel pessimistic.

The proportion of leaders feeling confident about the eating and drinking out market, in general, has also risen quarter-on-quarter by ten percentage points to 40%.

Leaders remain more optimistic than in the independent market, where confidence in general (23%) and their own business (33%) are lower, influenced by reduced profits and higher rates of closure seen in the latest Hospitality Market Monitor.

However, all figures remain below the levels seen before the pandemic, and the survey continues to reveal the ongoing impacts of inflation on hospitality. A quarter (25%) of leaders say their business operated at a loss in the first quarter of 2023, while 32% say their profitability has been below last year’s levels.

There are also signs that some businesses that were weakened by Covid-19 remain at risk. More than a quarter (28%) of leaders say they now have less than three months’ worth of cash reserves, and one in seven (14%) says their business is at risk of failure in the next 12 months, a figure that is unchanged from the January survey. 

Karl Chessell, CGA by NIQ’s director of hospitality operators and food, EMEA, said: “These figures highlight the impressive resilience of pubs, bars, and restaurants despite the enormous challenges of Covid-19 and the cost-of-living crisis. 

“All our research shows consumers remain eager to eat and drink out when they can, and business leaders are rightly confident about the long-term outlook for hospitality. 

“Nevertheless, the relentless rise in bills for businesses and consumers alike leaves many firms and jobs extremely vulnerable. Until inflation finally eases conditions will remain very difficult, and hospitality deserves targeted government support to mitigate costs.”

Sebastien Sepierre, MD of EMEA, Fourth, added: “It’s encouraging to see business confidence rise across the sector in recent months, despite soaring product costs, labour shortages, and sky-high energy bills continuing to ravage the sector. It’s crucial that businesses are getting access to as much support as they can get and are utilising the right tools and technology to help them operate as efficiently as possible, giving sector businesses full control and oversight of their spending across labour and supply.”