Hospitality sees fourth straight month of YOY growth

The UK hospitality sector saw a 10.9% year-on-year sales increase in January 2023, its fourth consecutive month of growth, according to data from CGA strategy.

This figure of 10.9% is ahead of the current rate of inflation, 10.1%, as measured by the consumer prices index from CGA.

However, trading in January benefited from comparisons with early 2022, when some consumers stayed at home amid concerns about the Omicron variant of Covid.

The high inflation means that sales are still behind pre pandemic levels.

Pubs saw the biggest growth of 12.9% with restaurants seeing sales rise 10.3%. The bars segment saw sales decrease 3.1%.

January sales inside the M25 rose 19.9% as workers returned to offices and visitors returned to London. This number was more than double the growth outside the capital which was 8.8%.

Karl Chessell, director – hospitality operators and food, EMEA at CGA, said: “These figures show consumers remain eager to eat and drink out despite the mounting pressure on disposable incomes. It’s particularly pleasing to see such a strong bounce back in London, where sales have been hit harder than in other cities by Covid disruption.

“Optimism for 2023 must be tempered by ongoing concerns about fragile consumer confidence and the debilitating inflation that businesses face in energy, food, labour and other key costs. But while hospitality faces challenges in the months ahead, it remains a dynamic sector with a bright long-term future.”

Paul Newman, head of leisure and hospitality at RSM UK, added: “After 15 consecutive months of like-for-like sales growth failing to beat inflation, these results represent a significant turning point for the sector even if the comparative period was somewhat subdued due to omicron concerns.

“This growth underscores the resourcefulness of operators to adapt their January offering to cater to the increasingly popular Veganuary and Dry January campaigns, whilst managing the well-versed cost pressures that the sector is facing. These results will be a welcome confidence booster to an industry that has been in desperate need of some good news and will hopefully herald the start of a sustained period of stronger trading.”

CGA collected sales figures directly from 79 leading companies for the latest edition of the Coffer CGA Business Tracker.