Hospitality sees fractional sales growth of 0.1% in February
Despite a 2.5% increase in total sales in February for these hospitality groups, extremely tight margins persist in the industry due to key inflationary costs
The top restaurant, pub and bar groups saw their like-for-like sales grow by a fractional 0.1% in February, as consumers continue to remain watchful of their disposable income, according to the latest CGA RSM Hospitality Business Tracker.
The 0.1% rise is still well below the current rate of inflation and continues a “challenging” start to the year for the hospitality industry, following a year-on-year drop of 1.3% in January.
Despite a 2.5% increase in total sales in February for these hospitality groups, extremely tight margins persist in the industry due to key inflationary costs.
According to the data, pubs performed the best of the major hospitality channels for the third month in a row as like-for-like sales finished 1.7% ahead of February 2024, due in part to the boost provided by the start of the Six Nations rugby tournament.
Meanwhile, restaurant groups’ sales fell by 0.6% due to some consumers limiting their spending on meals out. While February benefits from Valentine’s Day, this year it occurred on a Friday – a day that already generally sees higher on-premise visitation when compared with other days of the week.
Bars continued a long-term drop in growth, with like-for-like sales down by 7.9% in February, and the on-the-go segment of the market slipped 1.9%.
Hospitality had a slightly tougher month in London than elsewhere, the Tracker revealed, as groups’ sales inside the M25 were down by 1.2% year-on-year. Beyond the M25 they recorded a marginal rise of 0.5%.
Karl Chessell, director at CGA by NIQ, said: “After a flurry of spending over Christmas it’s clearly been a challenging start to 2025 for the hospitality sector. Growth is very fragile, and hikes in National Insurance Contributions will pile even more pressure on managed groups.
“We remain optimistic that spending will start to loosen, and brighter weather and big occasions like St Patrick’s Day, Mother’s Day and Easter should help to rally sales. Nevertheless, real-terms growth will remain hard-earned for the foreseeable future.”
Saxon Moseley, head of leisure and hospitality at RSM UK, added: “Consumers are opting to cut back on discretionary spending amidst growing apprehension about the UK economy and global instability. While the medium-term outlook appears more positive, the coming months will be critical for businesses grappling with both waning demand and rising costs.
“Next week’s Spring Statement represents a final opportunity for the government to support the sector through this challenging period, with a phased introduction of National Insurance increases and a delay to implementing the Employment Rights Act high on operators’ wish lists.”