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Inflation puts the boot in World Cup boost

Published:  15 December, 2022

The UK hospitality trade rode a wave of World Cup fever in November, when sales were above a still somewhat Covid-dampened environment at the end of 2021. However, with inflation biting hard and more disruption on the way over Christmas 2023, operators could be set for a challenging end-of-year run.

According to the Coffer CGA Business Tracker, like-for-like sales at Britain’s leading managed pub, bar and restaurant groups were up by 3.7% in November versus the same month in 2021.

Growth in November 2022 was up against 2019 too, rising by 5%.

Overall however, inflation is having a dampening effect on the market. The Consumer Price Index now shows inflation of more than 11% in the last 12 months alone, meaning that hospitality’s sales are significantly down in real terms.

Karl Chessell, director for hospitality operators and food, EMEA at CGA, said it is likely to be a challenging end-of-year period for many, as restaurants and bars are “trading way behind the rate of inflation”.

“It was a positive November for pubs screening World Cup matches, and another strong month for London as workers and visitors continue to return to the capital, especially ahead of the festive season,” he said, adding however, that spiralling costs could leave many hospitality businesses “extremely fragile”.

“With little respite in sight, there is a strong case for urgent and targeted government support to protect businesses and jobs,” he added. 

For pubs in particular, November was a strong month in terms of turnover (+8.1% YOY). Bars and restaurants had a tougher trading month, with sales slipping -8.6% and -0.8% respectively.

Speaking on yesterday’s ONS figures, UKHospitality chief executive Kate Nicholls also sounded a note of caution over inflation.

“While the headline rate of inflation has reduced slightly, it remains the case that hospitality businesses are seeing intense inflation in every aspect of their operations. In particular, energy, food and drink costs continue to rise and will be taking up a significant proportion of business spend.

“These levels of inflation will not disappear overnight and businesses are doing everything they can to keep costs down, but they need certainty on the future of the government’s energy support scheme beyond March. It’s crucial that the hospitality sector is included in future energy support to help businesses survive and ensure they can keep prices down for customers,” she said.