Hospitality sales rise 5% in June, but inflation ‘bites’
Restaurants were the strongest performing in June with like-for-like sales growth of 8%, and pubs’ sales were up by 3% on a three-year basis, while bars’ sales rose by 5%
Britain’s managed restaurant, pub and bar groups saw like-for-like sales in June rise 5% above pre-Covid levels in June 2019, representing the “strongest” month of like-for-like growth since the start of 2022.
However, according to CGA’s Tracker, produced in partnership with The Coffer Group and RSM UK, June’s figures are skewed by the Queen’s Platinum Jubilee, which provided two bank holidays against none in June 2019. The growth is also reportedly below inflation as measured by the Consumer Price Index, which recently topped 9%.
Restaurants were the strongest performing of three hospitality segments in June, with like-for-like growth of 8%. Pubs’ sales were up by 3% on three years ago, and bars’ sales rose by 5%.
Meanwhile, trading in London “remains challenging”. After a “flat” performance in May, like-for-like sales within the M25 were down by 1% in June, compared to 7% growth beyond the M25. This follows rail strikes over several days in June, which reduced footfall from workers and visitors in London.
The Tracker also shows that some consumers who opted for deliveries since the start of the pandemic are now returning to eating out. Overall, managed groups’ dine-in only sales grew 2% on a like-for-like basis in June, marking the first time this year that they have been in line with total growth.
Karl Chessell, CGA’s EMEA director of hospitality operators and food, said: “Like-for-like sales growth of 5% would represent a strong performance for managed groups in most months. However, high inflation means sales are down in real terms, and mounting costs continue to pile pressure on profit margins.
“The first half of 2022 has brought some welcome stability to the hospitality sector, and consumers have returned to most of their pre-pandemic habits—but while the long-term outlook remains good, there may be some tough months ahead for many businesses.”
Mark Sheehan, managing director at Coffer Corporate Leisure, added: “We are seeing a very slow return to normality. Recent publicly announced results show Loungers at 17.9% like-for-likes on 2019 and Wetherspoons at 0.5% for example. Some operators and locations are trading well. Inflation and recruitment remains a priority.”
Paul Newman, head of leisure and hospitality at RSM UK, said: “A new prime minister could be just the silver lining operators have been waiting for, with a change in tone at the top of Government potentially bringing about meaningful reforms to the way businesses are taxed.”
