It continues a slow start to 2024 for the sector, after marginal growth of 0.1% in January in the wake of strong trading over Christmas.
“Subdued trading in February shows consumers remain watchful with their discretionary spending,” says Karl Chessell, director, CGA by NIQ.
“With costs still rising for businesses as well as individuals, margins are under pressure and some operators remain fragile.”
Restaurants were hospitality’s best performing segment in February with like-for-like growth of 2.2%, while pubs were only fractionally behind at 2.1%. However, bars suffered a 7.4% dip in sales, reflecting a squeeze on consumers’ late-night spending and a move towards earlier eating and drinking out.
The On The Go segment was 0.5% behind in February 2023.
Restaurant, pub, bar and On The Go operators performed slightly better in London than elsewhere in Britain. Group February sales within the M25 were 1.9% ahead of last year, compared to 1.3% outside it.
“A combination of bad weather and dwindling budgets put a dampener on Valentine’s celebrations, continuing a disappointingly slow start to the year,” says Paul Newman, head of leisure and hospitality at RSM UK.
“February’s weak sales underline current challenges in the hospitality sector at a time of rising wage bills, rents, and rates, with the recent spring Budget doing little to ease the burden.
“While there are signs for optimism in the future with inflation forecast to hit 2% in Q2, interest rates predicted to fall from summer and real wages growing for the rest of the year, the next few months will test many best-in-class managed groups and could see a further swathe of smaller independents give up the fight for survival.”