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Hospitality sales rebound in late December

Published:  10 January, 2022

Consumer footfall across the UK’s hospitality sector increased between Christmas and New Year, according to the latest CGA Drinks Recovery Tracker.

New data released by the analyst firm shows that on-trade sales picked up in the week before New Year's Eve, as consumer confidence levels rose and reaching an equilibrium of -13% below 2019 levels. This could be regarded as a positive outcome in light of the trading restrictions, which varied across the UK. In Scotland for example, social distancing rules led to a reduction in the number of covers for hospitality, and mask-wearing was re-introduced for England in public spaces. 

In addition, sales of spirits were extremely buoyant during the Christmas period, according to CGA. A rare bright spot could be found in spirits sales over the last week of 2021, which were 2% ahead of 2019 levels as drinkers made up for some of the festive occasions that had been lost before Christmas.

Nevertheless, CGA underlined that it was, overall, a very challenging month for the hospitality sector.

Footfall was hit particularly hard in the run-up to Christmas, as the government implemented Plan B measures and many consumers avoided social occasions. In the seven days to Saturday 18 December, drinks sales were down by 28% on 2019, and they plunged even further in the week to Christmas Day, at 32% down.

Newly released statistics from UHY Hacker Young backup this generally pessimistic appraisal. Losses at the top 100 UK restaurant groups increased 174% in a year to £673 million, up from a loss of £246 million in September 2020, according to the national accountancy group.

Despite the Government’s continuing support, some restaurant chains such as Prezzo, Byron Burgers and Carluccio’s went into insolvency during the pandemic. Other large chains, such as Frankie & Benny’s and Pizza Hut, were forced to close sites and drastically cut costs to keep their businesses afloat.

“For the second successive December, Covid-19 concerns and trading restrictions have significantly impacted drinks sales and stalled the on premise’s recovery,” said Jonathan Jones, CGA’s managing director, UK and Ireland.

“Christmas is the time when businesses generate the cash they need to sustain them through the next few months, but with many consumers still staying away, staff absences mounting and costs rising, many now face a very tough January. Grants to help compensate for lost sales have been welcome, but more government support is needed to protect thousands of businesses and jobs.”