Britain’s leading pub, bar, and restaurant groups reported a sixth month of year-on-year growth in March, with overall like-for-like (lfl) sales 1.4% ahead of last year but well below inflation, according to the latest Coffer CGA Business Tracker.

However, the rate of growth in March is the slowest of the first three months of 2023, attributed to pressures on consumer spending, mixed weather, and rail strikes.

Pubs showed lfl sales growth of 2.4% and restaurants 2.5%. Bar sales, however, fell 13.2% in the third consecutive month of decline.

London outpaced the regions and continued its ongoing recovery, with sales within the M25 3.1% ahead, compared to 1.2% outside the M25.

Karl Chessell, director - hospitality operators and food, EMEA at CGA by NIQ, said: “These figures emphasise that trading conditions in hospitality remain challenging and operators have to work hard to grab their share of sales. Consumers’ interest in eating and drinking out remains strong, but after adjustments for inflation it’s clear that in real terms, it is tougher for operators this year than last year.

“May’s three bank holidays will bring opportunities for strong trading, and there is cautious optimism that pressure on spending may ease as the year goes on. But the government’s reduction of support on energy bills from April, and increases in minimum wage levels, will add to the squeeze on operators, and real-terms growth will be difficult for some time to come.”

Mark Sheehan, managing director at Coffer Corporate Leisure, said: “The market remains challenging but there is some optimism among traders. Whilst top line growth lags inflation across the board many operators are looking to take advantage of better availability of property to build a selective pipeline of new sites. Much growth in sales is being derived from price increases rather than volume.”

Paul Newman, head of leisure and hospitality at RSM UK, said: “The hospitality industry is not immune to the ‘slowcession’ gripping the nation and these results reflect an industry that is stuck in a rut of modest like for like growth, but way below inflation. Operators will continue to feel the pinch until persistently high food price inflation begins to retreat but will be hopeful of an uplift in trade in mega-May to reverse this holding pattern of margin erosion.”