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Hospitality businesses pessimistic about 2018, says CGA finds
Trading in the eating and drinking sector is predicted to continue along its current difficult path in 2018, according to leaders surveyed by CGA.
The 2018 CGA Business Leaders report showed that operators entered 2018 on the back of a difficult year where, for the first time in the history of the survey, more leaders reported a performance below expectations over the last six months than those that managed to trade above expectations, 33% and 26% respectively.
Just 34% said they were optimistic about the eating and drinking out market as a whole over the next twelve months, with the dip in confidence coming as a result of a bevvy of challenges, such as the implementation of the National Living Wage and rising food costs and market saturation.
Difficulties had been intensified by Brexit, CGA's poll showed, pointing out that 67% of leaders said that their business had been directly, and negatively affected by the UK's decision to leave the EU, with fears that the move would impact staff availability, especially in London, continuing to rise.
The combination of challenges has led many brands to scale back openings in 2018, with 60% of industry leaders predicting fewer new entrants to the market in 2018 than in 2017 and a whopping 90% predicting more business failures during the year.
However, despite the hostile trading environment, leaders remained upbeat about their own businesses, as nearly two thirds said they were optimistic for their companies' prospects over the next twelve months and just 9% claiming they felt pessimistic about the year ahead.
Phil Tate, chief executive of CGA, said, "Our Business Leaders' Survey paints a complex and fascinating picture of prospects for British pubs, bars and restaurants in 2018. With property, people and food costs rising and the twin threats of saturation and Brexit looming large, brands face something of a perfect storm of challenges this year."
"But this is a very resilient industry, and our poll shows there are bright spots and opportunities for growth in the market too. People will continue to enjoy eating and drinking out in 2018, and operators that can best understand and deliver the experiences that consumers crave will be the winners in an ultra-competitive market," Tate added.