Restaurant sales slip as inflation continues to slash growth

The exclusive monitor — produced by CGA by NielsenIQ in partnership with The Coffer Group and RSM UK — was also ahead of pre-pandemic comparatives for the tenth month in a row, recording like-for-like growth of 5.0% on November 2019.

However, with the Consumer Price Index now showing inflation of more than 11% in the last 12 months alone, hospitality’s sales are significantly down in real terms.

“On the face of it, these figures are very promising especially in relation to turnover, but the consumer price index figures obviously counter this progress dramatically, as well as the deterioration of turnover because of a wide range of industrial actions – in particular, those relating to trains and local transport,” says David Coffer, chairman of The Coffer Group.

“With the impending strikes over the festive period there will certainly be further sector trading damage, but it is hoped that there will be extensive intolerance and resistance from the public wishing to seasonally celebrate for the first time in three years. It is hoped that this will see a dilution of the effect that is feared.”

The start of the FIFA World Cup Qatar 2022 delivered a strong November for pubs, where sales rose by 8.1% year-on-year.

However, the distraction of the tournament and pressure on discretionary spending made it a much more difficult month for the managed restaurant sector, where like-for-like sales slipped 0.8% from November 2021. Sales in the bars segment were down 8.6%.

“It was a positive November for pubs screening World Cup matches, and another strong month for London as workers and visitors continue to return to the capital, especially ahead of the festive season. But with restaurants and bars trading way behind the rate of inflation, consumer spending under strain and rail strikes threatening festive footfall, it will be a challenging December for managed groups,” says Karl Chessell, director – hospitality operators and food, EMEA at CGA.

“Spiralling costs leave many hospitality businesses extremely fragile, and with little respite in sight there is a strong case for urgent and targeted government support to protect businesses and jobs.”

The Tracker also indicates that London’s hospitality sector continues to bounce back from the upheaval of Covid-19. November sales within the M25 grew by 6.2% year-on-year — twice the rate of 3.0% outside the M25.