Restaurant sales fall flat in January as consumer spending squeezed
The flat start to the year indicates pressure on consumers’ spending after a bumper festive season that saw the Tracker finish 8.8% ahead in December 2023.
It suggests that trading was also constrained by 'dry January' resolutions, poor weather and further rail strikes.
“After spending freely in the run-up to Christmas, consumers were clearly watching their outgoings very carefully in January,” says Karl Chessell, director - hospitality operators and food, EMEA at CGA by NIQ.
“It is a reminder that while people remain eager to eat and drink out when they can, rising costs continue to limit discretionary spending.”
The Tracker — produced by CGA by NIQ in partnership with RSM UK — indicates like-for-like sales growth of 0.9% for restaurants in January, while pubs’ trading finished 1.5% ahead.
After strong growth in December, bars suffered a 13.6% drop in January sales, while the on-the-go segment was 1.1% behind.
Trading patterns were even across the country, the Tracker shows. Groups’ sales within the M25 in January were 0.7% up on last year, while sales outside it were exactly flat (0.0%).
It comes as figures from the Office for National Statistics show that the UK economy fell into recession at the end of last year.
Gross domestic product (GDP) fell by a larger than expected 0.3% in the three months to December after a decline in all main sectors of the economy and a collapse in retail sales in the run-up to Christmas.
It followed a drop of 0.1% in the third quarter, confirming a second consecutive quarter of falling national output – the technical definition of a recession.
“With hospitality operators’ margins also still squeezed by inflation, the sector needs sustained government support on taxes and other issues if it is to unleash its full potential to invest and create jobs,” Chessell adds.
