Leading sector analyst Simon French at Cenkos Securities has said that on the back of the decision to leave the EU, the pub and restaurant industry “should plan for the worst (i.e. a re-run of 2008-10)”.

Publishing a note on the back of Whitbread’s announcement of the sale and leaseback of its partly built 389 room Hub by Premier Inn hotel in Kings Cross to Legal and General for total proceeds of £84.5m, French said he saw two potential demand shocks from higher unemployment - PWC estimate 950k - (and more importantly those who are worried they will become unemployed who therefore curtail spending until the worst has passed) and less disposable income through higher prices for essentials due to imported inflation on petrol, utilities and clothes.

He said: “Higher imported supermarket prices appear likely to be offset by a seemingly inevitable price war amongst the majors and perhaps an acceleration in shift towards discounters.

“Other things to consider for operators include the potential for a VAT increase to fill a wider hole in the public finances and an increase in fuel, drink and gaming duties. This could potentially be offset by the abolition of the National Living Wage ‘target’ of £9 by 2020 which would appear to be unwise to pursue in the prevailing economic climate particularly given restrictions on movement of labour will likely rebase wages from a supply and demand perspective.

“Furthermore we expect the property market to re-balance with premiums seemingly evaporating overnight and rent reviews should remain benign over the medium-term.

“From a trading perspective we expect branded operators to outperform independents as consistency of offer once again becomes more important to a less confident consumer, although clearly there has been a dramatic increase in branded supply with branded restaurant, fast food and managed pub units up 11.4% since 2012 (source: MCA - The UK Restaurant Market 2015). In the financial crisis consumer confidence fell to -39 from -2 (close to the -1 it was in June 2016, pre Brexit survey).

“In addition the household savings ratio of 5.9 is close to the 2008 nadir of 4.3 albeit above the recent Q1 2015 low of 5.5; we therefore expect the priority for consumers will be to rebuild balance sheets (by Q3 2010 household savings ratio had reached 11.2) particularly given expected house price falls.”