Industry faces ‘severe pressure’ this Christmas, CGA warns

Christmas trading is under severe pressure following the introduction of restrictions due to the Omicron variant of Covid, and with supply and staffing costs all rising, revealed the latest Coffer CGA Business Tracker.

The tracker, produced by CGA in partnership with TheCoffer Group and RSM, revealed that rising costs in food, drink, energy and other key inputs have put operators’ margins under strain.

Additionally, there are rising concerns regarding the impact of ‘Plan B’ restrictions that were announced by the Government this week, which the CGA warns will “further dent” consumer confidence and restrict trading in “the most important month of the year” for pubs, bars and restaurants.

According to the research, concerns have mounted over the measures impacting hospitality’s “fragile recovery” as November sales held steady.

CGA revealed that Britain’s managed pub, bar and restaurant groups recorded “tentative” sales growth in November, with total sales up by 2% on the pre-Covid levels of November 2019.

Additionally, the pub and bar sectors both achieved sales growth of 3%, just ahead of restaurants at 2%. It is the fourth month in a row that 2021 sales have exceeded 2019 levels.

However, the rate has dropped from 8% in September and 3% in October, and November’s 2% growth is below most current inflation estimates. 

The tracker also revealed contrasting fortunes for groups in London, where total sales dipped by 2%, and venues outside the M25 rose by 4%. CGA said this suggests the capital is still suffering from an absence of office workers and domestic and international visitors.

Karl Chessell, CGA’s EMEA director of hospitality operators and food, said: “The new Covid variant adds yet another threat to trading in the most important month of the year. The next few weeks will be crucial to give hospitality some momentum for growth in 2022, but new restrictions may threaten the future of thousands of fragile businesses and jobs.”

Mark Sheehan, managing director at Coffer Corporate Leisure, added: “This is a fragile recovery. November’s sales were relatively strong, but the current uncertainty is going to hit Christmas badly. However, the outlook is much brighter and despite some bumps in the road we expect a strong 2022.”

Paul Newman, head of leisure and hospitality at RSM, said: “Operators will be desperately hoping that Brits go ahead with plans to celebrate over the festive season with friends and family in their local hostelry to close out such a challenging year on a more positive note.”