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UK pubs, bars and restaurant sales hit by inflation and labour shortages

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Pubs, bars and restaurants across Britain are under pressure from rising inflation, labour shortages and supply chain constraints as they struggle to recover from the impact of the COVID-19 pandemic.

Sales rose by 3% in total at the UK’s managed restaurant, pub and bar groups in October compared with the same month in 2019, according to the latest Coffer CGA Business Tracker.

But post-lockdown demand appears to be waning, as the October rise was below the 8% sales growth seen in September, with consumers now starting to feel the pain from rising food, drink and energy costs.

Sales fell by 4.5% in the 12 months to end-October compared with the previous 12 months, CGA said.

October was a slightly better month for pub groups than restaurants, with total sales growth of 3% and 2% respectively, while bars saw the highest increase with sales rising 13% as the recovery of the late-night market continued.

A shortage of office workers and tourists impacted London, where sales fell by 4% in October compared with 2019. In contrast, sales outside the M25 motorway rose by 6%.

Karl Chessell, director of hospitality operators and food, EMEA at CGA, commented: “Managed groups battled hard to sustain sales in October, but patchy consumer confidence and a host of external challenges are making real-terms growth elusive.

“Hopes are pinned on a strong Christmas trading period, but the sector needs and deserves sustained support in many areas well into 2022 to help fuel its recovery.”

Mark Sheehan, managing director at Coffer Corporate Leisure, hailed the strong performance of bar groups: “The bar and late-night market particularly is very strong and we see this improvement as sustainable not just in the short term but to 2022 and beyond. Very good operators are performing well in most locations.”

But Paul Newman, head of leisure and hospitality at RSM, warned of possible tough times ahead: “Post lock-down euphoria appears to be waning with sales growth compared to 2019 falling to 3% in October vs 8% in September as consumers begin to feel the impact of rising household bills on discretionary spending,” he said.

“It could spell the start of a long, hard winter for the sector if this downward trajectory in sales growth continues for the rest of the year.”

Story by ProactiveInvestors


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