Confidence returns to hospitality sector

The majority of managed pub, bar and restaurant leaders are optimistic about the year ahead, according to a new CGA survey.

The Business Confidence Survey from CGA and Fourth, found that 79% of leaders feel optimistic about prospects for the eating and drinking out market in general over the next 12 months – the highest number for more than six years.

According to CGA, confidence levels have not reached that level since February 2015, and have risen sharply from the quarterly survey’s results in October (18%) and February (50%).

More leaders (83%) said they feel optimistic about prospects for their own business over the next 12 months and CGA said the upswing in confidence coincides with the easing of restrictions and reopening of hospitality.

The Business Confidence Survey indicated a solid start to trading since outside service resumed in mid-April, with 58% of leaders rating their performance since then as ahead of their expectations, and 8% below.

However, the survey also found that only two in five (41%) businesses are now either trading at a profit or expect to do so by the end of June. It also highlighted some big issues facing hospitality over the remainder of 2021, especially around staff recruitment and retention, as well as the Indian Covid-19 variant.

Karl Chessell, CGA’s director - hospitality operators and food, EMEA, said: “After the immense challenges of 2020 and early 2021, it is very encouraging to see confidence levels riding so high across the managed sector. The figures are testament to the resilience of operators and the enduring appeal of restaurants, pubs and bars to consumers, and we can be optimistic that sales will follow confidence in bouncing back strongly this summer.”

Chessell said the road to recovery could be “long and uneven” and he emphasised the need for sustained support on challenges such as rent, rates and recruitment.

Sebastien Sepierre, managing director – EMEA, Fourth, added: “It’s incredibly encouraging to see optimism levels increase amongst business leaders. This positivity is tempered somewhat by the challenging labour market, with many operators struggling to recruit in the current climate as the demand for workers accelerates with the easing of restrictions.

”As the industry slowly returns to full capacity, the recruitment challenge will be further exacerbated, so it’s never been more important for businesses to look at driving efficiencies and productivity in their management of labour.”