Hospitality sales drop by 48% in Q3

Hospitality sales in the UK have dropped by 48% in the third quarter, according to trade association UKHospitality and market analyst CGA.

Sales for the year totalled £80.3bn, which is £53.2bn less than the £133.5bn that the sector contributed to the UK economy in 2019.

This seismic drop in sales follows the end of the government’s ‘Eat Out to Help Out’ scheme, which offered promotional deals in hospitality venues during August, after the initial lockdown.

Kate Nicholls, CEO of UKHospitality, said: “This is clearly dreadful news and made all the more desperate when combined with the expectation that Christmas will be, for many businesses, very bleak. 

“Regional lockdowns and additional restrictions are also beginning to bite businesses hard. This highlights the need for clarity on the roadmap for businesses in tier 2 and 3 regions.”

She added: “We need some idea of how businesses can plan to move out of the higher tiers, to give themselves a half chance of success. Otherwise, these awful figures are likely to be surpassed in Q4.” 

Phil Tate, group CEO of CGA, said: “The Tracker makes plain the seismic impact of COVID-19 and restrictions on hospitality. 

“After sales were all but wiped out in the second quarter, a 48% fall in the third is not the recovery the sector was hoping for, in spite of the temporary boost from Eat Out to Help Out.”

He added: “Hospitality’s sales are inextricably tied to government restrictions on trading and socialising, and every new measure deals another blow to operators and the supply chain. 

“Businesses have responded to the pandemic with resilience and innovation, but they need proper, sustained support over what is going to be an extremely challenging winter.”