Eating and drinking out businesses “remain optimistic” despite “significant” market challenges

05/10/2017 - 07:00
The latest Business Leaders’ Confidence survey from data and research consultancy, CGA, reveals that two thirds of eating and drinking out businesses “remain upbeat about prospects…while acknowledging significant challenges in the market.”

Speaking to 160 “chief executives, managing directors, chairmen and other senior directors and management” in the out-of-home food and drink sector, the poll found that:

  • 66% of respondents were positive about prospects for their own company over the next 12 months
  • 76% said that so far their business’ performance had been in line with, or above, expectations in 2017

That said, operators did express concern about the general trading environment, claiming that “the most severe consequences of Brexit were still to be felt.” The fact that only a third (34%) said they were “optimistic” about the next 12 months – compared to 43% in May this year - was also a major indication, as is:

  • 81% said that their business has been affected by increases in food costs; of which 70% admitted to passing on costs to consumers via menu price rises in the last quarter
  • 78% said they had been hit by increased business rates, 70% by increased staff costs and 45% by the impact of terrorism
  • 71% agreed that the decision to leave the EU had already had a negative impact on their business

Speaking in support of out-of-home business, who are also worried about “the public’s likelihood to continue to go out to eat and drink,” chief executive of the Association of Licensed Multiple Retailers (ALMR), Kate Nicholls commented: “The drop in employer confidence underlines the need for Government action to reassure businesses and provide stability and clarity.

“Fears of future Brexit-related impacts appear to be as much of a problem as other legislative and financial burdens already taking their toll. Decisive action from the Chancellor to reduce wage and property costs can provide employers with a boost, but we also need reassurance from The Department for Exiting the European Union (DExEU) that negotiations and trade deals will provide UK businesses with the flexibility and stability they need.”  

CGA vice president, Peter Martin, also said: “Before the Brexit referendum confidence in the market was sky high. It plummeted straight after the vote, and although confidence in both leaders’ own businesses and to a lesser extent the general market have recovered, they are not back to early 2016 levels. The worrying aspect is the gap between market and company optimism and the effect this uncertainty might have on decision-making, especially around investment and growth,” Martin added.

“The good news is our findings is that two thirds of business leaders are upbeat about their own prospects, which is a welcome corrective to the doom and gloom, and a reminder of the intrinsic dynamism and ambition of large parts of Britain’s eating and drinking out industry.”

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