UK pubs, bars and restaurants sales hit by inflation and labor shortages

Sales rose 3% in groups of restaurants, pubs and bars managed in the UK in October compared to the same month in 2019, compared to an increase of 8% in September.

Pubs, bars and restaurants across Britain are under the pressure of rising inflation, labor shortages and supply chain constraints as they struggle to recover from the impact of the COVID-19 pandemic.

Sales increased 3% overall in UK restaurant, pub and bar groups managed in October compared to the same month in 2019, according to the latest Coffer CGA Business Tracker.

But demand after the lockdown appears to be waning, as October’s rise was lower than the 8% sales growth seen in September, with consumers now starting to feel the pain of rising food, beverage and consumer costs. ‘energy.

Sales fell 4.5% in the 12-month period to the end of October compared to the previous 12 months, CGA said.

October was a slightly better month for pub groups than for restaurants, with total sales growth of 3% and 2% respectively, while bars saw the biggest increase with sales up 13% as that the recovery of the night market continued.

A shortage of office workers and tourists hit London, where sales fell 4% in October compared to 2019. In contrast, sales outside the M25 motorway rose 6%.

Karl Chessell, Director of Hospitality and Food Operators, EMEA at CGA, said: “Managed groups struggled to maintain sales in October, but uneven consumer confidence and a host of external challenges are making growth in real terms difficult to achieve.

“Hopes rest on a strong Christmas trading period, but the sector needs and deserves sustained support in many areas through 2022 to help fuel its recovery. “

Mark Sheehan, Managing Director of Coffer Corporate Leisure, praised the solid performance of the bar groups: “The bar and nightlife market in particular is very strong and we see this improvement as sustainable not only in the short term but until 2022. and beyond. Very good operators work well in most places.

But Paul Newman, head of recreation and hospitality at RSM, warned of possible tough times ahead: feeling the impact of rising household bills on discretionary spending, ”he said. .

“This could mark the start of a long and harsh winter for the industry if this downward trajectory in sales growth continues for the remainder of the year.”

Shares of advertising groups JD Wetherspoon Plc (LSE: JDW), Mitchells & Butlers (LSE: MAB) and Fuller Smith & Turner (AIM: FSTA), which fell 28%, 22% and 21% respectively over the past years. last six months, were up slightly at lunchtime on Monday.

It was similar for Wagamama owner Restaurant Group PLC (LSE: RTN), down 33% in the past six months, although Franco Manca and Greek owner of Real Fulham Shore PLC (AIM: FUL), which fell only 6% in the last half. -year, was down 3% on the day.

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