Hospitality groups sales up 4%, but inflation hinders growth
Britain's managed restaurant, pub and bar groups achieved solid growth from pre-Covid-19 levels in March, but with high inflation hitting both margins and spending, hospitality's recovery remained fragile.
According to the Coffer CGA Business Tracker, produced by CGA in partnership with the Coffer Group and RSM, groups' like-for-like sales in March 2022 were 4% higher than in March 2019. It continued a gradual upturn this year, after a like-for-like drop of 1% in January and 3% growth in February.
Bars performed the strongest of the tracker's three sectors in March, with like-for-like sales growth of 8%. Restaurants were close behind with 6% growth, thanks in large part to flourishing delivery sales, while pubs were up 2%.
Trading in London continued to lag well behind other parts of the country. Managed groups' like-for-like sales inside the M25 in March were flat, compared to 6% growth beyond the M25.
Karl Chessell, director - hospitality operators and food, EMEA at CGA, said: "It's particularly pleasing to see bars performing so well, as people return to late-night visits. However, like-for-like figures are well below inflation, and with soaring costs in energy, food and other areas hurting both operators and consumers, real-terms growth will be extremely challenging for some time."
Mark Sheehan, managing director at Coffer Corporate Leisure, said: "After a long challenging period for operators the recovery is slow and the challenges faced by the sector are wide. These numbers are improving though and returning workers and tourists in increasing numbers should help lift London over the coming months."
Paul Newman, head of leisure and hospitality at RSM, added: "The sector is being challenged with extreme cost inflation pressures at the same time as consumers are facing increased restrictions on their discretionary spending. The extent to which customers can bear higher prices in order to protect already slim profit margins will be critical as businesses navigate their way through what will be testing times over the next six to nine months."
