Business optimism for 2018 falls
Only 30% of leaders of restaurant, pub, bar and coffee shop groups are optimistic about general market prospects for the next 12 months, says CGA, down from 47% of people in the first quarter of 2017.
Optimism about prospects for their own businesses has followed a similar trajectory, falling from 68% in the first quarter to 52% in this latest survey.
The research, based on responses from more than 100 senior executives across the sector, including big corporates and small entrepreneurial operators. It also found that a third (32%) of leaders admit their business’ performance has been below expectations in the last six months - down by five percentage points from May’s survey.
The new figures chime with other CGA research indicating tough trading conditions.
The Coffer Peach Business Tracker reveals that like-for-like sales at leading managed pub and restaurant chains have risen by just 1.3% over the past 12 months, while the CGA Prestige Foodservice Price Index has demonstrated sustained rises in food costs over 2017.
Property and people costs have also increased this year.
On a more positive note, CGA’s BrandTrack survey found that consumers eat out just as often as they did four years ago and that frequency among 18 to 44 year-olds is at a four-year high.
The company’s latest Business Confidence Survey found that optimism is unlikely to increase in the short term, with more than half (57%) of leaders concerned about consumer confidence over the next six months - though only one in eight (12.2%) is pessimistic about their own business’ prospects for the next year.
“With food, property and people costs all rising, consumer confidence softening, competition intensifying and Brexit casting a long shadow over the future, operators are enduring something of a perfect storm of challenges,”says CGA vice president Peter Martin.
“But this is a creative and resilient sector, and while leaders’ optimism has been dented this year, they will be rolling up their sleeves and fighting hard for growth in 2018.”
Other issues highlighted by the survey include:
• Brexit fall-out. 71% of leaders say the decision to leave the EU has had a negative impact on their business, with only 3% citing a positive impact
• Rising costs. More than three quarters of leaders say increasing costs of raw materials (79%) and rates (78%) have negatively affected their business
• Price rises. More than two thirds (69%) of leaders say their business has increased menu prices over the last quarter in light of soaring costs.
