Confidence among multi-site restaurant, pub and bar business leaders about the sector over the next 12 months has increased six percentage points since December 2021, to 65%, according to the latest CGA and Fourth’s Business Leaders’ Survey.
The number of leaders feeling confident about their own business’ prospects has also increased, by two percentage points, to 68%. While more than four in five (84%) of respondents stated their businesses were currently operating at a profit – a rise of four percentage points since the December survey – with 5% reporting a loss.
Despite overall optimism about the sector, concerns about rising costs for both business and consumers was evident, with 93% of leaders stating they had concerns about inflation in food and drink prices, with 79% worried about the cost of living crisis.
Nine in 10 leaders have already been impacted by higher costs across the supply chain, wit the majority having passed, or are planning to pass, some of the costs onto consumers, via higher food prices (87%).
On average, menu prices are rising by 8%.
Phil Tate, CGA Group CEO, said that after two years of Covid-19-related disruption, the survey showed that multi-site businesses were finding their feet again.
“Hospitality remains a very attractive sector for consumers and investors alike, and as we move into the second quarter of 2022, we can be cautiously confident that sales and profits will continue to build.
“However, businesses that were weakened during the pandemic now face more fierce headwinds, and inflation is making it tough to achieve real-terms growth. The end of VAT relief and lack of government support in the recent Spring Statement risks stalling hospitality’s recovery just as it gathers pace.”
Sebastien Sepierre, managing director – EMEA, Fourth, added: “While it’s encouraging to see business confidence climb, the impact of rising costs, supply chain issues and the ongoing recruitment challenge continues to be extremely threatening to the sector.”
