Only two in five hospitality businesses are currently turning a profit, research shows

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Only two in five hospitality businesses are currently turning a profit, research shows

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Only two in five hospitality businesses are currently trading at a profit but confidence about future trading is on the rise, a new survey from CGA and Fourth has revealed.

The latest Business Confidence Survey indicates a solid start to trading since outside service was permitted from mid-April, with 58% of leaders in the managed restaurant, pub and bar sector rating their performance since then as ahead of their expectations, and just 8% below. Yet despite this, only two in five (41%) businesses are now either trading at a profit or expect to do so by the end of June, the survey shows.

The survey has found that 79% of business leaders are optimistic about the prospects for the eating and drinking out market in general, a level of confidence last reached in February 2015. Slightly more leaders (83%) say they feel optimistic about prospects for their own business over the next 12 months.

However, concerns over the Indian variant of COVID-19 and the risk of extended restrictions as well as around staff recruitment and retention will also temper optimism in the weeks ahead, CGA predicts.

“After the immense challenges of 2020 and early 2021, it is very encouraging to see confidence levels riding so high across the managed sector,” says Karl Chessell, CGA director for hospitality operators and food. “The figures are testament to the resilience of operators and the enduring appeal of restaurants, pubs and bars to consumers, and we can be optimistic that sales will follow confidence in bouncing back strongly this summer.”

“There’s no escaping the fact that COVID-19 has taken a massive toll on hospitality, with thousands of businesses closing for good and many more still in a precarious position. The road to recovery could be long and uneven, and the sector is going to need sustained support on challenges like rent, rates and recruitment.”

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