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UK hospitality sector endures 'devastating' Christmas period, says new data

Published:  13 January, 2022

Newly released data from UKHospitality and CGA Strategy paints a grim picture for on-trade businesses, with sales in UK pubs, restaurants and bars falling 60% on Christmas Day, 31% on Boxing Day and 27% on New Year’s Eve, when compared to 2019.

What would traditionally be a bumper sales period for the industry may now be remembered as a lost chance to rebuild crucial cash reserves in the sector, delaying its recovery and leaving many businesses exposed going into the traditionally quiet winter months.

A separate industry survey also noted that the wider hospitality sector will have seen a 40% drop in sales overall for the month versus the same period in 2019. The frightful festive figures represent a £3bn hit to the industry, versus 2019.

According to UKHospitality, venues in Scotland and Wales were particularly affected in the week leading up to New Year, where more stringent restrictions were in place.

However, earlier data released by CGA showed that overall UK hospitality sales picked up in the week before New Year's Eve, reaching an equilibrium of -13% below 2019 levels. This was presumably due to the fact that English businesses were not subject to the harsher restrictions of Wales and Scotland; nightclubs in Wales were forced to close on Boxing Day in 2021.

UKHospitality CEO, Kate Nicholls, commented: “December is a vital period for hospitality businesses, equal to three months’ worth of trading for many. These new figures are crippling for an industry already struggling but also spell disaster for the wider UK economic recovery, as ONS figures showed that overall growth in Q3 was driven by hospitality.

She added: “These sales drops versus 2019, and also against our members’ projections before the onset of the new Omicron variant, will have taken most businesses from healthy trading for the month to painful losses, delaying the sector’s recovery and extending hospitality’s long Covid. Cash reserves are severely depleted, and some businesses will struggle to survive the first quarter of 2022.

“A pivotal moment for the recovery is approaching. As recent quarterly GDP figures show, the hospitality sector can play a leading role in driving the recovery. Crucial to this is the right support and keeping VAT at 12.5% will enable the sector to safeguard jobs and crucially, it will help keep down costs for our guests amid some very strong inflationary pressures. Reducing rates bills in 2022/23 will also be important in enabling businesses to recover again.”