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Positive sales figures not enough to prevent operators from raising prices: report
Food price inflation hit 9.1% in the fourth quarter of 2023.
Net sales revenue in the fourth quarter of 2023 grew by 6.1% compared to the same period in 2022 but is still not enough to offset the high cost of doing business, forcing operators to take cost-saving measures, a report by Fourth revealed.
Food price inflation hit 9.1% in Q4 2023, leaving operators little choice other than to raise their prices by an average of 7.1% to offset costs. This move has still resulted in many businesses struggling to stay afloat, with a large number of closures reported at the very start of this year.
Meanwhile, staff headcount continues to dip across hospitality, having fallen 2% in Q4 2023 compared to Q4 2022. Headcount in pubs decreased 6% in December 2023 compared to December 2022, whilst the number of restaurant workers fell by 2.5%. In contrast, hotels showed modest growth with a rise of 0.8% year-on-year.
The proportion of new starters has fallen significantly, dropping 30% in November 2023 versus the previous year. Whilst the festive period typically represents a busy time for recruitment, these figures are likely a reflection of the increased costs of doing business, as operators are reluctant to hire more staff for fear of further eating into their bottom lines.
The average number of hours worked has also dropped, and restaurants were the hardest hit with monthly hours worked down by 3.7% year-on-year in December. Hours in pubs also declined, down 0.8% in December 2023 compared to 2022. Hotels were the only sector where hours worked grew in December 2023 compared to the year before, up 0.8%.
“With the festive trading period being such a crucial time for hospitality, it’s fantastic to see such a significant growth in sales compared to 2022. These figures can hopefully provide operators with a sense of cautious optimism as we head into 2024. The high cost of doing business across the sector continues to be a major concern for operators, who are looking to control costs in an effort to remain profitable during this turbulent economic period,” Sebastien Sepierre, Managing Director – EMEA at Fourth, said.
