Optimism about future trading recovering despite major challenges: survey
Many of the respondents called for further Government help, including an extension on the VAT reduction, reform of business rates and business rates relief for 2022/23.
Seven in 10 (70%) restaurant, pub and bar leaders feel optimistic about their businesses’ prospects for the next 12 months, according to the third-quarter Business Confidence Survey from CGA and Fourth.
The number is 13 percentage points less from the second-quarter survey—when optimism was inflated by the reopening of hospitality venues for the first time in 2021—but is the second-highest figure since the May 2018 edition of the poll.
Almost three in five (58%) leaders feel optimistic about prospects for the general market over the next 12 months.
Other positive indicators include: 69% of businesses currently trading at a profit—more than four times the 16% who were doing so three months ago, 39% of leaders say they are performing “ahead of expectations”, compared to 23% trading below expectations and 38% in line.
70% of businesses have opened all the sites in their estate, whilst 92% have opened at least nine-tenths of their venues.
However, more than four in five business leaders would like to see a VAT reduction extended beyond March 2022 (84%), business rates reform (81%) and business rates relief in 2022/23 (81%), and over two thirds (71%) support measures to address labour shortages in hospitality and the supply chain.
Karl Chessell, CGA’s director - hospitality operators and food, EMEA, said: “Many operators enter the autumn on the back of strong August sales, and momentum is building in consumer confidence and spending. But the damage that COVID-19 has wreaked on the sector will be felt for years to come, and with debt repayments and tax rises ahead, profits are going to be needed for months to come if businesses’ finances are to be secured. Firms remain in need of support on their tax burdens, labour shortages and much more, but with the right backing hospitality is well placed to power the UK’s economy as it builds back from the pandemic.”
Over nine in 10 leaders say technology has been fundamental (44%) or helpful (50%) to their return, and nearly half (47%) have improved their view of it. Two in three (65%) respondents are planning to use them more than they did before the pandemic, compared to just 1% who will use new tech less.
Sebastien Sepierre, managing director – EMEA, Fourth, said: “The ongoing staffing and supply chain issues are continuing to heavily impact business performance and it remains unclear how long these challenges are going to ravage the sector. What is clear, however, is that the digital transformation journey is set to continue across the industry, helping businesses streamline, perform better and drive efficiencies.”