Nearly two thirds of hospitality leaders ‘not optimistic’ about market

06/12/2017 - 07:00
Only 30% of leaders from Britain's eating and drinking out industry are optimistic about the prospects of the market over the next 12 months, a CGA survey has found.

The lack of optimism from the 120 stakeholders which took part in CGA's quarterly report, half of whom were chief executives or managing directors, was 17% worse than in February 2017 and 6% down on November 2016

When asked the same question in February 2015, 93% of respondents said they had confidence in the market.

Meanwhile, 52% said they were optimistic about their own businesses, a drop of 9% from November last year and a drop of 39% from February 2015.

Asked if they thought consumers will eat and drink out as regularly as they currently do in six months time, 68% felt the rate of people dining out of home would decrease and 24% said it was unlikely to change.

8% predicted more people would eat and drink out than they currently do.

In contrast, only 1% of those asked in February 2015 predicted that footfall for the market would decrease.

The nature of the responses in comparison to 22 months ago suggests the EU referendum and its fallout has knocked confidence within the industry, although less than half of the ‘pessimistic’ leaders cited Brexit as a reason for market pessimism

An increase in the cost of raw materials and ingredients was the biggest cause for concern with 98% saying this had already had or would have an affect on business.

The increased cost of imported goods was the next most popular reason cited for industry worry at 93%, followed by business rates (92%), increased costs in the out of home market (89%) and decreased staff availability (89%).

When it came to consumer spending, respondents were more encouraged with only 33% predicating a fall in average spend and 27% predicting a rise.

A study from Barclaycard this week showed spending in restaurants is currently up 11.79% on last year while online sales have grown by over 20%.

Two out of three leaders surveyed by CGA said they had increased food and/or drink prices over the past three months to help offset cost pressures.

Despite this, Barclaycard’s data showed the average transaction value in restaurants for the year is currently down 7.6% on 2016.

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