Home Business News Hospitality sales flat in January as consumer spending is squeezed

Hospitality sales flat in January as consumer spending is squeezed

by Amy Johnson LLB Finance Reporter
15th Feb 24 9:59 am

Britain’s leading hospitality groups generated like-for-like sales growth of just 0.1% in January, the latest CGA RSM Hospitality Business Tracker reveals.

The flat start to the year indicates pressure on consumers’ spending after a bumper festive season that saw the Tracker finish 8.8% ahead in December 2023.

Trading was also constrained by Dry January resolutions, poor weather and further rail strikes.

The Tracker—produced by CGA by NIQ in partnership with RSM UK—indicates like-for-like sales growth of 0.9% for restaurants in January, while pubs’ trading finished 1.5% ahead. After strong growth in December, bars suffered a 13.6% drop in January sales, while the on-the-go segment was 1.1% behind.

Trading patterns were even across the country, the Tracker shows. Groups’ sales within the M25 in January were 0.7% up on last year, while sales outside it were exactly flat (0.0%).

Karl Chessell, director – hospitality operators and food, EMEA at CGA by NIQ, said, “After spending freely in the run-up to Christmas, consumers were clearly watching their outgoings very carefully in January.

“It is a reminder that while people remain eager to eat and drink out when they can, rising costs continue to limit discretionary spending. With hospitality operators’ margins also still squeezed by inflation, the sector needs sustained government support on taxes and other issues if it is to unleash its full potential to invest and create jobs.”

Saxon Moseley, leisure and hospitality partner at RSM UK, said, “Given the impact of successive storms Henk, Isha and Jocelyn that left many Brits sheltering at home in January alongside acute competition for scarce discretionary spending, these results demonstrate the appetite of consumers who continue to favour experiences over ‘things’.

“With ongoing cost pressures having already accounted for some recent high-profile restaurant closures, operators will be hoping that the continued fall in inflation, the prospect of interest rate cuts in the Spring and the Six Nations rugby will tempt consumers to venture out and support their local establishments.”

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