Sector outlook remains gloomy as consumers exercise caution

By James McAllister

- Last updated on GMT

Sector outlook remains gloomy as consumers exercise caution

Related tags: ukhospitality, Cga, Restaurant, Coronavirus

Consumers are 'returning cautiously' to hospitality with many industry leaders saying the outlook for the sector remains gloomy, according to the latest Future Shock report from CGA and UKHospitality.

The report, which pools CGA and UKHospitality’s latest authoritative data from the industry, says that the hospitality sector accounted for a third of the UK’s entire drop in GDP in March and April.

Outlining the size of the challenge currently faced by operators, the research shows that just under a quarter (23%) of consumers are returning to venues with caution; and a third only doing so if they are sure that added precautions were in place.

Only one in six (16%) leaders say they are optimistic about the prospects of the market in the next 12 months.

“The last four months has been the most difficult period of trading that most of us in the industry have ever seen," says Karl Chessell, business unit director for retail and food at CGA.

"CGA’s data shows how the pandemic caused a sudden and dramatic downturn in sales and had a seismic effect on consumer behaviour, and the big question now is how quickly the market can recover.

"There are clearly many tough challenges ahead, but with the backing of consumers and the right support from government, businesses can not just survive the pandemic but thrive in the happier times that lie ahead.”

The report does identify green shoots of recovery, and celebrates the success of UKHospitality’s efforts to lobby for government support for the sector.

It uses insights from CGA’s research in China and the US to predict crucial changes in consumer habits that are likely to shape the hospitality market in the next few months.

They include an increasing desire to use local venues rather than travel to city centres, a new preference for booking ahead, and an emerging polarisation between the value and premium ends of the market.

“There is still a huge amount of graft to be done if we are to make it through this crisis in one piece, but if any sector can emerge stronger it is hospitality," says Kate Nicholls, UKHospitality chief executive.

"We have pushed – and will continue to push – hard to persuade UK governments to provide as much support as possible to keep businesses afloat and jobs secure, and have done everything we can to help pave the way for recovery."

Related topics: Business

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