Hospitality ‘nowhere near able' to tackle costs amid contraction in turnover

Hospitality turnover in the past year was down 14.7% compared to pre-pandemic levels after accounting for inflation, according to industry figures.

The UKHospitality Quarterly Tracker, in association with CGA, revealed that despite revenue amassed over the last 12 months being 4.1% above pre-pandemic levels, it still fell "significantly below" the ‘like-for-like' sales required to keep up with inflation, which hit a forty-year record-high last August.

The sector's turnover had also decreased by 0.3% in Q1 this year, compared to Q1 in 2022.

It comes after industry hiring platform Caterer.com reported that UK hospitality salaries rose by an average of 9.5% over the past year, compared to the national average of 6.6%.

Entry-level employees working in bars received some of the highest pay rises at 11.6%, it added.

Commenting on the results, Kate Nicholls, chief executive of UKHospitality, said: "Unfortunately, these figures no longer come as a surprise and simply reinforce the chronic nature of the pressure hospitality is under due to inflation.

"Despite consumer demand remaining strong and revenue being up on 2019, businesses are simply nowhere near able to keep up with the cost pressures they're facing across energy, food and drink.

She added: "Even more concerning is that our fears that this endless pressure would cause the sector to contract are starting to be realised, with turnover contracting in the first quarter of this year.

"While it's marginal at the moment, we want to stem that bleeding, so support from Government is essential. Energy remains the single biggest cost to businesses and direction to energy suppliers from Ofgem and the Government to renegotiate the highest contracts is an essential starting point."