2014 confidence boost for UK restaurants and pubs

According to the annual Business Leaders’ Survey from CGA Peach, 90 per cent of the country’s top executives are feeling positive about 2014 – up from 78 per cent last year. Numbers feeling very optimistic have doubled, from 15 to 29 per cent.

CGA Peach’s Peter Martin said: “Our research over the last few years has consistently identified a flat, fickle and fierce market - of broadly static sales, scant brand loyalty among consumers and a rising intensity of battle between operators.

“But the Business Leaders’ Survey shows much more cause for confidence this year and, set alongside our Coffer Peach Business Tracker, it provides cautious optimism that Christmas might have marked a turning point for casual dining, pubs and the wider out-of-home market.

“But it is clear that we are not out of the woods yet, and operators will have to be firmly on their mettle in 2014.”

This growing confidence is backed up by figures from the Coffer Peach Business Tracker, which recorded like-for-like sales growth across major groups of 3.3 per cent and 7.2 per cent in December 2013​​ and January 2014​ respectively.

Proceed with caution​

The Business Leaders’ Survey, sponsored by Omnico, follows a year that turned out to be better than many in the sector had expected. Forty-four per cent of business executive said their business performance in 2013 had exceeded expectations - up from 34 per cent who said the same for 2012. Only one in eight executives said their business performance was ‘worse than expected’ last year.

But the Survey also reveals reasons to temper optimism for 2014. Half of leaders (52 per cent) think real growth in disposable income is still a year to 18 months away, and another quarter (28 per cent) estimate that it is further off still. Competition in the marketplace remains high, so any substantial growth in 2014 may well arise from market-share gains rather than organic increases.

Businesses also face a variety of challenges in 2014; from rising property prices, energy and staffing costs. The Survey reveals widespread concern about all three this year, and hikes in food prices remain an issue too.

“It is clear that our leaders are well placed to grasp the opportunities that 2014 will bring, but they may also wish to reflect on some of the threats and knowledge gaps that our poll reveals,” added Martin.

Business Leaders’ Survey: Key findings​​ 

• Investment confidence returns ​- Over half of leaders think access to funding has improved significantly (20 per cent) or marginally (40 per cent), and only one in six (17 per cent) think it remains challenging.
• Casual dining boom ​- More than half of leaders (58 per cent) believe premium casual dining and fast food will thrive in 2014. Flexible, all-day formats and pared-back, express-style concepts are also widely tipped.
• Transport hubs​ – Seventy-nine per cent of restaurant and pub business executives think big train stations and airports will be a growth hotspot this year.
• BBQ & craft beer ​- Barbecue is tipped by half of leaders (50 per cent) to make a big impact this year, and more than two thirds (68 per cent) think craft beer will do the same. Upmarket pizzas and craft ciders are among other likely food and drink trends.
• Customer experience and staff engagement​ -Nearly nine out of ten leaders (87 per cent) identify each of these as ‘major operational challenges’ in 2014.
• Technology challenges -​ Taking full advantage of mobile and social media are particular issues, and the proportion of operators using data to drive consumer insight remains relatively low.

The CGA Peach Business Leaders’ Survey drew responses from 172 senior executives.