The Tracker — produced by CGA by NielsenIQ in partnership with The Coffer Group and RSM UK — also shows growth of 4.3% from October 2019, meaning sales have beaten pre-pandemic comparatives for nine months in a row.
However, with inflation now in double digits, sales are significantly behind 2021 and 2019 in real terms.
“It’s been encouraging to see hospitality sales running ahead of pre-Covid levels for nearly all of 2022,” says Karl Chessell, director - hospitality operators and food, EMEA at CGA.
“But after adjusting for the effect of higher prices it’s clear that footfall is down, and inflation means sales are even further behind in real terms.
“Sustained increases in energy, food, property and other costs are putting a very tight squeeze on both consumers’ discretionary spending and operators’ profits, especially in restaurants. The sector must now pin hopes on a strong festive season to make up some of the growth that has been lost over a variety of unprecedented challenges.”
Pubs were the strongest performing of the Coffer CGA Business Tracker’s three segments in October, with year-on-year sales growth of 6.4%.
Restaurants endured a tough month with like-for-like sales down by 3.6% on October 2021, while bars’ sales slipped 12.7%.
London’s hospitality sector continued its recent rebound from more than two years of Covid-related upheaval, as tourists and workers steadily returned to the capital. Groups’ October sales within the M25 finished 6.4% ahead year-on-year—in sharp contrast to regions beyond the M25, where like-for-likes were up by only 0.3% from October 2021.
“October’s shift to a pint and a bite in a pub over a more expensive restaurant meal is a clear signal that demand for out-of-home socialising remains strong, but that belts are being tightened in response to the cost-of-living crisis,” says Paul Newman, head of leisure and hospitality at RSM UK.
“With any uplift in sales cannibalised by rising costs, margins are being squeezed and the entire industry is now geared towards maximising Christmas trade. With last year’s festivities severely impacted by Omicron, 2022 needs to deliver if the sector is to avoid a swathe of closures in the New Year.”
