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Hospitality endures sluggish October growth despite licensed premises rise

CGA’s Hospitality Business Tracker – produced by CGA by NIQ in partnership with RSM UK – revealed that groups sales inside the M25 were actually down by 0.1% year-on-year, while venues further afield achieved a paltry 0.9% growth.

According to CGA by NIQ: “This marks the fourth month of below-inflation like-for-like growth in a row, and means the Tracker is now at its lowest point since April. The flattening of sales reflects fragile consumer confidence amid ongoing cost increases, as well as poor weather for much of October. Weak growth raises concerns for trading over the crucial Christmas period, and adds to new pressures on hospitality’s tax burden set out in the government’s recent Budget.”

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However, events associated with Halloween, many of which took place during the first weekend in November, have contributed to “a bright start to the month for pubs and bars in particular” according to CGA’s tracker.

“Managed pubs achieved like-for-like growth of 1.5%, but it was a challenging month for restaurants, where sales were clipped by 0.1%,” said a representative from CGA by NIQ.

Elsewhere in the hospitality sector, bar sales declined 4.2% below the levels of October 2023. Meanwhile, on-the-go groups performed best of the major segments with 4.3% growth.

Karl Chessell, director for hospitality operators and food, EMEA at CGA by NIQ, commented: “It’s clearly been a tough autumn for many restaurants, pubs and bars, and real-terms growth remains elusive. Conditions haven’t been helped by the Budget, which is imposing significant new costs on businesses via National Insurance contributions while giving consumers little encouragement on spending. It is going to be a make-or-break Christmas for some operators, and while underlying demand for hospitality remains good, trading conditions are likely to remain very difficult well into 2025.”

Saxon Moseley, head of leisure and hospitality at RSM UK, added: “October’s disappointing results shows the industry essentially stalled last month, with poor weather and concerns about potential tax rises in the Autumn Budget putting consumers off from venturing out. In hindsight, many of those fears were misplaced, as the Budget did not directly increase taxes on consumers.

“However, the proposed fiscal changes are expected to have a severe impact on the hospitality industry, with increases in National Minimum Wage, employers’ NIC and business rates all set to reduce margins and push some businesses into the red. Looking ahead, operators will have little choice but to raise prices, although without a significant boost in consumer confidence, there is little guarantee this will translate into positive like-for-like sales.”

• growth
• hospitality
• consumer confidence
• hospitality sales