Managed groups see sales dip 11% in December as Omicron hit consumer confidence

By James McAllister

- Last updated on GMT

Managed hospitality groups see sales dip 11% in December as Omicron hit consumer confidence

Related tags: Omicron, Cga, Casual dining, Managed pubs, Coronavirus

Britain’s managed restaurant, pub and bar groups suffered a double-digit sales drop from pre-Covid-19 levels in December after widespread cancellations of Christmas celebrations, the latest Coffer CGA Business Tracker reveals.

The Tracker, produced by CGA in partnership with The Coffer Group and RSM, shows groups’ total sales in the last month of 2021 were down by 11% on December 2019.

It followed four successive months of 2021-on-2019 growth​, and shows the damaging impact of the Omicron variant of Covid-19 on the hospitality sector, as many consumers opted to stay at home in the run-up to Christmas.
 
The Tracker indicates a tougher Christmas for managed pubs and bars, where sales were down by 12% and 19% respectively, than for restaurants, where they were down by 8%.

It also highlights a particularly difficult month for London, with sales down by 19% within the M25 — more than twice as big as the drop of 8% beyond the M25.

“These figures show the hugely damaging impact of consumers’ anxiety and restrictions on trading at what should have been the busiest time of year," says Karl Chessell, director - hospitality operators and food, EMEA at CGA.

"Restaurant groups in particular did well to shore up sales as much as they did, but on top of rising costs, supply problems and staff challenges, the difficult December leaves many businesses without the buffer of cash they would normally rely on in January.

"Demand for eating and drinking out remains strong, but the sector needs support on tax and other pressures if it is to help power the UK’s economic recovery when Covid-19 restrictions finally ease.”

It is understood that Prime Minister Boris Johnson will announce the removal of most Coronavirus restrictions in England later today (19 January).

According to The Times​, work from home guidance and the requirement for Covid passes that have blighted the late night sector are due to be scrapped from next week, although people will still be told to wear facemasks. However, whether the latter remains law or is simply guidance is still being finalised.

“These results are not surprising," says David Coffer, chairman at Coffer Corporate Leisure, responding to the Tracker.

"If anything, many anticipated worse. The pre-Christmas growth was euphoric and in stark contrast to the major drop-off in the most important trading months of the year.

"The industry lives in hope that the impending lifting of restrictions, especially working from home, will see a spike in demand in the early part of the year. The industry is desperately in need of cash injection and there are many, no doubt, who will be on the brink of closure as a result of the impact of Omicron. The spectre of debt in so many forms is ever becoming a reality and we may well see an abundance of casualties throughout the industry as a result.

"London was a virtual desert throughout the seasonal period as a result of the restrictions of congestion charge, parking and health warnings which made punters consider a visit to the central core over the festive period with great caution. 

"The big question is whether the culture of central city leisure has changed irreversibly – only time will tell.”

Related topics: Trends & Reports, Casual Dining

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