UKHospitality Says Poor Festive Trading Hits Hospitality Revival Hopes As Cash Reserves Are Further Depleted

New knowledge from UKHospitality and CGA exhibits gross sales in pubs, eating places and bars down 60% on Christmas Day, 31% on Boxing Day and 27% on New Yr’s Eve, in comparison with 2019

Newest figures from the pub, bar and restaurant market reveal how the hospitality market suffered devastating gross sales falls within the final week of the 12 months. What would historically be a bumper gross sales interval for 1000’s of hospitality companies is more likely to be remembered as a misplaced probability to rebuild essential money reserves within the sector – delaying the restoration and leaving many companies uncovered going into the fallow winter months.

Gross sales have been an enormous 60% down on Christmas Day as prospects opted to not dine out, whereas Boxing Day gross sales fell by a 3rd (31%) and takings on New Yr’s Eve – one of many greatest particular person buying and selling days within the calendar for a lot of venues – have been down by greater than 1 / 4 (27%).*

The depressed figures captured by UKHospitality and specialist perception consultancy CGA symbolize a ‘misplaced Christmas’ and cap off a devastating December.

Based mostly on a separate trade survey, the broader hospitality sector could have seen a 40% drop in gross sales total for the month versus the identical interval in 2019 – the final ‘regular’ Christmas earlier than the onset of the Covid-19 pandemic.  The frightful festive figures symbolize a £3bn hit to the trade, versus 2019.

Venues in Scotland and Wales have been hit even worse within the week main as much as New Yr, the place extra stringent restrictions have been in place. The sector in Wales carried out twice as badly as England, and in Scotland 2.5 instances worse, within the week ending 1^st January 2022.

General, the findings display how the trade’s battle to get well from the pandemic has been severely hampered by Omicron. Within the weeks previous to the brand new variant rising, common gross sales had been recovering steadily by way of the autumn and have been near pre-pandemic ranges (98%).

Commenting, UKHospitality CEO Kate Nicholls, mentioned: “December is a crucial interval for hospitality companies, equal to a few months’ price of buying and selling for a lot of. These new figures are crippling for an trade already struggling but in addition spell catastrophe for the broader UK financial restoration, as ONS figures confirmed that total development in Q3 was pushed by hospitality.

“These gross sales drops versus 2019, and in addition towards our members’ projections earlier than the onset of the brand new Omicron variant, could have taken most companies from wholesome buying and selling for the month to painful losses, delaying the sector’s restoration and lengthening hospitality’s lengthy covid. Money reserves are severely depleted, and a few companies will battle to outlive the primary quarter of 2022.

“This dreadfully disappointing December has additional stymied our capability to ship jobs, development and funding at tempo, which everyone knows is so essential to the restoration of our financial system total.”

Firms working teams or ‘chains’ of pubs or eating places fared barely higher than independents, in accordance with knowledge analysed from the CGA Managed Quantity Pool which relies on precise gross sales from 5,500 pubs, bars and eating places, operated by multiple-site companies.  These venues, that are usually bigger and higher invested, noticed gross sales fall a 3rd within the week as much as Christmas and by round a fifth within the week as much as New Yr.

Hospitality is dealing with important headwinds in 2022, compounding a difficult outlook for 1000’s of companies and thousands and thousands of employees. Sector companies face a cliff edge in April when VAT is about to return to twenty%, plus an increase in enterprise charges and labour prices.

All this, on prime of hovering vitality prices, the rising price of food and drinks and an finish to the lease moratorium.

Kate Nicholls added: “A pivotal second for the restoration is approaching. As current quarterly GDP figures present, the hospitality sector can play a number one position in driving the restoration.  Essential to that is the suitable assist and conserving VAT at 12.5% will allow the sector to safeguard jobs and crucially, it’s going to assist maintain down prices for our company amid some very robust inflationary pressures.  Decreasing charges payments in 2022/23 may also be necessary in enabling companies to get well once more.”