Hospitality groups report 1.3% growth in August
Dreary weather and underwhelming consumer confidence were cited as the reason.
Britain’s leading hospitality groups reported a year-on-year sales growth of 1.3% in August 2024, according to the latest edition of the CGA RSM Hospitality Business Tracker.
Karl Chessell, director - hospitality operators and food, EMEA at CGA by NIQ, said that August’s figures complete a modest summer for hospitality groups, and with the weather and consumers’ confidence both underwhelming, real-term growth has been elusive.
“Whilst 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,” Chessell said.
Saxon Moseley, head of leisure and hospitality at RSM UK, said that 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 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,” Moseley said.
Meanwhile, the report said hospitality 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 report said managed pubs outperformed the 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, whilst 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.
