Sales growth was a virtually flat 0.1% in January, the latest CGA RSM Hospitality Business Tracker reveals.
The stagnant start to the year indicates pressure on consumers’ spending after a bumper festive season that saw the Tracker finish 8.8% ahead in December 2023.
The survey of managed restaurant, pub and bar groups showed trading was also constrained by Dry January, poor weather and further rail strikes.
The Tracker—produced by CGA by NIQ with RSM UK—showed a mixed picture, with like-for-like sales growth of 0.9% for restaurants in January.
Pubs saw growth of 1.5%, but after a strong December, bars suffered a 13.6% drop in sales in January. The food-to-go segment was 1.1% behind.
Trading patterns were even across the country, with sales within the M25 in January were 0.7% up on last year, while sales outside it were exactly flat (0.0%).
Karl Chessell, director - hospitality operators and food, EMEA at CGA by NIQ, said: “After spending freely in the run-up to Christmas, consumers were clearly watching their outgoings very carefully in January. It is a reminder that while people remain eager to eat and drink out when they can, rising costs continue to limit discretionary spending. With hospitality operators’ margins also still squeezed by inflation, the sector needs sustained government support on taxes and other issues if it is to unleash its full potential to invest and create jobs.”
Saxon Moseley, leisure and hospitality partner at RSM UK, said: “Given the impact of successive storms Henk, Isha and Jocelyn that left many Brits sheltering at home in January alongside acute competition for scarce discretionary spending, these results demonstrate the appetite of consumers who continue to favour experiences over ‘things’. With ongoing cost pressures having already accounted for some recent high-profile restaurant closures, operators will be hoping that the continued fall in inflation, the prospect of interest rate cuts in the Spring and the Six Nations rugby will tempt consumers to venture out and support their local establishments.”
