Business leaders’ confidence drops as costs rise

Optimism among Britain’s hospitality leaders has taken a sharp downward turn with only 41% of leaders feeling confident about prospects for their business over the next 12 months, according to data from CGA.

This is a dip of 8 percentage points from August’s figure of 49%, a fourth quarter-on-quarter decline in a row, and optimism is now at its lowest point since October 2022.

Meanwhile, only 20% of leaders feel optimistic about the future of hospitality in general over the next year—a near-halving from 36% just three months ago.

Close to half (46%) say they are pessimistic about the next 12 months, which is double the number (21%) in August.

The growing negative segment follows tough trading conditions in the third quarter of this year.

The proportion of leaders reporting a year-on-year increase in revenue has fallen from 64% to 41%—driven by moves by many consumers to cut their spending.

Two thirds (65%) said their guest footfall has decreased year-on-year, while two in five (41%) have seen total spend drop.

Just over half (54%) say visitors are buying fewer drinks, with only 10% observing an increase in purchases.

Karl Chessell, CGA by NIQ’s director – hospitality operators and food, EMEA, said: “These numbers highlight the increasing polarisation of hospitality this year—between both consumers spending more or less, and leaders feeling optimistic or pessimistic. CGA’s research elsewhere shows some managed restaurant, pub and bar groups continue to grow sales and open new sites, but for many others this has been another challenging year.

“The Budget has fallen some way short of the support that business leaders were hoping for, and the increase in National Insurance contributions will put even more operators at risk of failure. Christmas trading may bring some relief, but longer term optimism is likely to stay very restrained well into 2025.”