CLH News’ Post

Modest Start To Autumn For Hospitality As Groups’ Sales Rise 1.7% In September Britain’s leading hospitality groups recorded year-on-year sales growth of 1.7% in September, the latest edition of the CGA RSM Hospitality Business Tracker reveals. It means managed operators have achieved like-for-like increases in eight of the nine months of 2024. Following recent below-inflation growth – of 1.5% in July and 1.3% in August – industry growth has matched the inflationary rate of 1.7% in September. While this is a welcome improvement, it is a sign of the continuing challenges to real terms growth, as the sector enters the crucial final quarter of the year. Total sales growth in September—including new venues opened during the last 12 months—was healthier at 3.7%. The Tracker—produced by CGA by NIQ in partnership with RSM UK—shows September was a solid month for restaurants, with like-for-like sales rising 3.2%—double the rate of 1.5% for managed pubs. Bars extended a sustained period of negative numbers with a drop of 3.8%, while the on-the-go segment achieved 4.3% growth. As was the case in August, trading in London was slightly softer than the rest of the country. Sales inside the M25 were 1.3% ahead of September 2023, while venues further afield achieved 1.9% growth. Karl Chessell, director – hospitality operators and food, EMEA at CGA by NIQ, said: “Against the comparative of a sunny start to autumn in 2023, September’s dismal weather made real-terms growth for hospitality groups challenging. Pubs faced a particularly difficult month, with the rain keeping people out of beer gardens and terraces—though it did at least drive some of them indoors to give restaurants a brighter time. While some positive economic indicators raise confidence for a brighter final quarter of 2024, hospitality continues to battle substantial headwinds, and the forthcoming Budget is an opportunity to give the sector the targeted support it deserves.” Saxon Moseley, head of leisure and hospitality at RSM UK: “September’s results continue the recent trend of steady but unremarkable growth for the sector, with consumer confidence and spending spooked by the government’s talk of “tough” decisions to come in this month’s Autumn Budget. Another concern for operators is the recent flurry of staff related legal and tax changes hitting the industry. With the new tipping legislation and the Employment Rights Bill already set to increase the cost burden of employing staff, a potential hike in National Insurance contributions alongside National Minimum Wage rate increases could push many businesses to the brink before the all-important festive trading season.” Read More:

𝗪𝗲𝗮𝘁𝗵𝗲𝗿 𝗰𝗼𝗼𝗹𝘀 𝗵𝗼𝘀𝗽𝗶𝘁𝗮𝗹𝗶𝘁𝘆 𝗴𝗿𝗼𝘂𝗽 𝗽𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 𝗮𝘀 𝘀𝗲𝗰𝘁𝗼𝗿 𝘀𝗲𝗲𝘀 𝟭.𝟱% 𝘀𝗮𝗹𝗲𝘀 𝗴𝗿𝗼𝘄𝘁𝗵 𝗶𝗻 𝗝𝘂𝗹𝘆: 😍 Britain’s managed hospitality groups reported year-on-year growth of 1.5% in July 2024, down from June’s rate of 2.9%, the latest CGA RSM Hospitality Business Tracker reveals. As July started with the peak of the 2024 Euros, including the quarter, semi-final and final games, Britain’s pubs enjoyed a more positive outcome from the tournament than the England team, experiencing like-for-like growth of 4.9%. The best performing segment in July, pubs within the M25, performed especially well, with 9.9% like-for-like growth. It was a slightly more negative picture for other segments as consumers shifted their spend towards pubs. Restaurant performance saw steep declines, dropping from a 4.7% increase in June to a 2.1% drop in July. Bars had another negative month, down by 6%, while the on-the-go segment saw like-for-like growth of 1.5%. CGA director Karl Chessell said: “With most positive growth being seen in the pub sector in July, this had a knock-on effect to other hospitality venues as they saw like-for-like drops in performance. For hospitality as a whole, this isn’t necessarily a negative thing. The uplifts seen based on key events within the month show that whilst the cost-of-living pressures are still ongoing, consumers are still making those all-important visits to hospitality venues. As we move into the back end of summer, with warmer weather, and an upcoming bank holiday at the end of the month, we hope to see growth spread more equally across key segments.”

Does the hospitality sector have reason for optimism in 2024? The number of licensed premises in Briton dropped by 0.8% in Q4 of 2023. Plus, pub closure rates remained high as patrons favor food focused, over drink focused, outings. Despite this, our experts foresee a brighter second half of 2024, with inflation pressures easing and financing costs leveling off. Read more insights in the AlixPartners Hospitality Market Monitor report.

Grey Summer Ends with 1.3% Growth for Hospitality Groups in August Britain’s leading hospitality groups achieved modest year-on-year sales growth of 1.3% in August 2024, the latest edition of the CGA RSM Hospitality Business Tracker reveals. Groups have now achieved like-for-like increases in every month of 2024 except April. However, it is a second successive month of below-inflation growth, and the Tracker has topped 4% only once since the start of the year. Total sales growth in August, including new venues opened during the last 12 months, stood at 3.7%. The Tracker—produced by CGA by NIQ in partnership with RSM UK—shows managed pubs outperformed the licensed sector as a whole in August, with year-on-year growth of 2.9% despite disappointing weather. Restaurants recorded a 0.8% increase, but bars continued a long run of negative numbers with a drop of 9.0%. The on –the go segment achieved 5.0% growth. Sales rose by 1.2% inside the M25 in August, while venues further afield fractionally outperformed with 1.4% growth. It is only the second time this year that the capital has recorded weaker figures than the rest of the country. Karl Chessell, director – hospitality operators and food, EMEA at CGA by NIQ, said: “August’s figures complete a modest summer for hospitality groups, and with the weather and consumers’ confidence both underwhelming, real-terms growth has been elusive. While some bars and restaurants have found it hard to sustain footfall, the picture has been brighter at pubs, especially given the impact of the cool temperatures on beer gardens and terraces. Consumers remain eager to eat and drink out when they can, but operators will be hoping they will feel confident enough to spend more freely as we move towards the crucial final quarter of 2024.” Saxon Moseley, head of leisure and hospitality at RSM UK, said: “After a lacklustre summer, the hospitality sector will be hoping for further government support in the Autumn Budget, including business rates reform, a reduction in VAT to bring the sector in line with our European counterparts and a fall in employer national insurance contributions to help operators cope with increases in wages. All these things can help reduce the cost burden on hospitality and, crucially, stimulate sales growth. However, a “painful” Budget could dent consumer confidence and with it, discretionary spending and business investment which would hold back any recovery and apply more pressure ahead of the all-important festive trading season.” Read More:

Weather Cools Hospitality Groups Performance Whilst Pubs Win The Euros Britain’s top hospitality groups achieved year-on-year growth of 1.5% in July 2024, down from June’s rate of 2.9%, the latest CGA RSM Hospitality Business Tracker reveals. As July started with the peak of the 2024 Euro’s, including the quarter, semi-final and final games, Britain’s Pubs enjoyed a more positive outcome from the tournament than the England team, experiencing like-for-like growth of 4.9%. The best performing segment in July, and the heart of England’s Euro’s support, Pubs within the M25 performed especially well with 9.9% like-for-like growth. It was a slightly more negative picture for other segments as consumers shifted their spend towards pubs. Restaurant performance saw steep declines, dropping from +4.7% in June, to –2.1%. Bars had another negative month, down by -6.0%. The on-the-go segment saw like-for-like growth of +1.5%. Karl Chessell, director – hospitality operators and food, EMEA at CGA by NIQ, said: “With most positive growth being seen in the pub sector in July, this had a knock-on effect to other hospitality venues as they saw like-for-like drops in performance. For hospitality as a whole, this isn’t necessarily a negative thing. The uplifts seen based on key events within the month show that whilst the cost-of-living pressures are still ongoing, consumers are still making those all-important visits to hospitality venues. As we move into the back end of Summer, with warmer weather, and an upcoming Bank Holiday at the end of the month – we hope to see growth spread more equally across key segments.” Saxon Moseley, head of leisure and hospitality at RSM UK, said: “Much like the Euro 2024 final, there were winners and losers in July’s results. While pubs reaped the benefits of a sports-fuelled July, restaurants and bars saw negative like-for-like sales, with some operators even closing early due to cancelled bookings and reduced demand. With disposable incomes still recovering from the cost-of-living crisis, these results do demonstrate that there is only so much set aside for leisure spending, underscoring the intense competition for customers across different segments of the market. Well run businesses with differentiated offerings and flawless experiences will continue to do well as real wages rise and confidence returns in the second half of the year.” Read More:

Celebrations And Early Easter Boost Growth In March Britain’s top hospitality groups achieved above-inflation like-for-like sales growth of 5.2% in March 2024, the latest CGA RSM Hospitality Business Tracker reveals. Many operators will have enjoyed the boost to trading that events such as Mother’s Day and St Patrick’s Day brought, but the high growth metrics seen in the Tracker have been aided by early Easter Bank Holiday revenues falling into March 2024, while last year Easter trading fell into April 2023. The Tracker—produced by CGA by NIQ in partnership with RSM UK—shows celebrations delivered particularly strong growth for the managed pub sector, where like-for-like sales were up by 7.2% in March. Growth was softer for restaurants at 3.4%, and the On The Go segment has seen 5.2% decline. Whilst bars still recorded a decline of 0.5% in March, this is somewhat of an improvement from the 13.6% and 7.4% declines in January and February respectively, showing the impact the early Bank Holiday weekend celebrations and holidays has had on the hospitality sector this month. For the first month since November, restaurant, pub and bar groups achieved higher growth outside London than within the capital. March sales inside the M25 were 4.0% ahead of last year, but ahead by 5.7% beyond it. Karl Chessell, director – hospitality operators and food, EMEA at CGA by NIQ, said: “These figures are encouraging for hospitality after a slow start to 2024 and show that people remain eager to celebrate holidays and special occasions in restaurants, pubs and bars. While spending remains tight for many consumers, we can be cautiously optimistic that their confidence will continue to increase in 2024 in line with an easing of inflation. Operators still face severe headwinds, and it may be some time before they generate sustained real-terms growth, but March showed the sector is moving in the right direction.” Saxon Moseley, head of leisure and hospitality at RSM UK, said: “An early Easter break and the arrival of Spring weather gave rise to inflation-beating sales growth in March, with pubs the main beneficiaries as friends and family opted to celebrate in their local establishments. After two months of sluggish growth to start the year, operators will be hoping these results represent the green shoots of consumer confidence returning to the market as inflation slows and energy prices fall. The sector has seen several high-profile closures in recent months, with more challenges to follow including minimum wage and rates increases in April and changes to tipping legislation in July. All will be hoping that this sales momentum can continue into the summer months to give businesses some much needed breathing space and help balance the books.” Read More:

Hospitality Ready To Invest And Grow, But Rising Costs Remain A Barrier A joint survey by UKHospitality, the British Beer & Pub Association, Hospitality Ulster and the British Institute of Innkeeping showed that pubs and hospitality venues have the appetite to invest in the future of their businesses, despite the wide range of cost pressures they continue to face. The survey revealed the clear desire from businesses to invest, both in development and training of their teams, and in venue refurbishments and improvements, but it also showed the challenges around rising wage bills, food and drink costs and disproportionately high taxation in relation to other sectors. Despite these pressures, 95% of operators are planning to invest in customer service, 92% in staff training, and 71% in venue refurbishments, all up significantly on last quarter. Research from CGA by NIQ revealed venue closures have slowed in recent months and despite the cost-of-living crisis, consumers are prioritising visiting hospitality venues as an “affordable treat” that they “most look forward to”. At a time when people are thinking carefully about spending their money, hospitality remains key to unlocking the growth that is lacking in the UK economy at present. As the UK’s third largest employer, the hospitality sector has the power and agility to act quickly and be part of this much needed growth, but it desperately need confidence that any increased trading will be converted into profit, before they will invest further. When comparing Q1 2024 to Q1 2023: - Despite more than 33% of operators seeing an increase in revenues, 70% of venues have seen a reduction in profit, with nearly 50% of venues operating at a loss or just breaking even. - One-in-four businesses still remain completely exposed, having no cash reserves, with nearly one-in-two having six months or less. - 66% of businesses now have significantly increased wage costs. In a joint statement, the trade bodies said: “Our regular survey of our joint memberships showed the resilience of our sector, as well as an appetite to invest in teams and venues for the future. Consumers choosing to spend their disposable income in pubs, restaurants, hotels, and cafes is no surprise, as we provide a much-needed opportunity for fun, celebration and vital social connection, but in order for our members to survive and thrive, they need to be profitable. “Their profitability has been heavily impacted by high inflation in food and drink, high energy costs, disruption from rail strikes and the impact of increased labour costs, that have had a ripple effect at every level. “The sector is innovative, adaptable and has the potential to provide much needed growth for the economy, creating vital local employment and bolstering local supply chains, all whilst supporting essential social connection in high streets, towns and cities. In order for operators to invest in this potential, however, the sector also needs a fairer, mo…

Hospitality Groups Deliver 1.4% Growth In February As Spending Pressures Continue Britain’s top hospitality groups achieved modest like-for-like sales growth of 1.4% in February, the latest CGA RSM Hospitality Business Tracker reveals. It continues a slow start to 2024 for the sector, after marginal growth of 0.1% in January in the wake of strong trading over Christmas. Patchy consumer confidence amid still-rising costs and economic and political uncertainty means many people remain cautious with their spending. The Tracker—produced by CGA by NIQ in partnership with RSM UK—shows restaurants were hospitality’s best performing segment in February with like-for-like growth of 2.2%, while pubs were only fractionally behind at 2.1%. However, bars suffered a 7.4% dip in sales, reflecting a squeeze on consumers’ late-night spending and a move towards earlier eating and drinking out. The On The Go segment was 0.5% behind in February 2023. Restaurant, pub, bar and On The Go operators performed slightly better in London than elsewhere in Britain. Groups’ February sales within the M25 were 1.9% ahead of last year, compared to 1.3% outside it. Karl Chessell, director – hospitality operators and food, EMEA at CGA by NIQ, said: “Subdued trading in February shows consumers remain watchful with their discretionary spending. With costs still rising for businesses as well as individuals, margins are under pressure and some operators remain fragile. But while the short-term outlook for hospitality is uncertain, underlying demand is good, and as inflation and interest rates hopefully ease and the Budget’s reduction in National Insurance contributions kicks in, we can be cautiously optimistic that people will start to loosen their spending over the Spring and Summer.” Paul Newman, head of leisure and hospitality at RSM UK, said: “A combination of bad weather and dwindling budgets put a dampener on Valentine’s celebrations, continuing a disappointingly slow start to the year. February’s weak sales underline current challenges in the hospitality sector at a time of rising wage bills, rents, and rates, with the recent Spring Budget doing little to ease the burden. While there are signs for optimism in the future with inflation forecast to hit 2% in Q2, interest rates predicted to fall from summer and real wages growing for the rest of the year, the next few months will test many best-in-class managed groups and could see a further swathe of smaller independents give up the fight for survival.” Read More:

Britain’s hospitality sector has recorded its first quarter-on-quarter growth in outlets in two years, the new Hospitality Market Monitor from AlixPartners and CGA by NIQ reveals. The exclusive report shows a 0.5% increase in the number of licensed premises between March and June 2024 – equivalent to 462 net new openings, or five per day. Graeme Smith, AlixPartners’ managing director, said: “The easing of the very significant pressures that have challenged businesses for the past 18 months – including spiralling energy costs, rising food, drink and labour inflation, and higher interest rates – has paved the way for a far more positive outlook." Read the full Hospitality Market Monitor > https://lnkd.in/g_SRZugv

⭐️ Restaurants and Pubs drive modest 1.4% hospitality growth in February ⭐️ Britain’s top hospitality groups achieved modest like-for-like sales growth of 1.4% last month, the CGA by NIQ RSM Hospitality Business Tracker reveals, highlighting: 🍴Restaurants were hospitality’s best performing segment in February with like-for-like growth of 2.2% 🍺 Pubs were only fractionally behind at 2.1%. 🍸Bars however suffered a 7.4% dip in sales, reflecting a squeeze on consumers’ late-night spending and a move towards earlier eating and drinking out. https://lnkd.in/eN4VECkC