Restaurants have outpaced pubs for growth, with leading managed hospitality groups achieving combined like-for-like growth of 0.9% in March, data from the new NIQ RSM Hospitality Business Tracker reveals.
While this was a better performance than either January or February, it is well below the country’s recent rate of inflation.
Managed bars, meanwhile, saw trading fall by 2.6% year-on-year, while there was marginal growth of 0.9% in the on-the-go segment.
“Sluggish like-for-like growth across the sector masks a change in fortunes for Britain’s eateries, with restaurants returning to growth at the expense of food-led pubs,” says Saxon Moseley, head of leisure and hospitality at RSM UK.
“However, the bigger picture suggests consumer spending has not increased significantly but is instead shifting between different segments of the market, highlighting the degree of competition amongst operators.”
The Tracker goes on to indicate the continued cautious expansion of managed groups. On a total sales basis — including at venues launched by hospitality groups in the last 12 months — sales rose 4.3%, just ahead of inflation.
Despite openings and real-terms growth, hospitality remains overwhelmed by high costs in key inputs like food, drink and labour.
There are also fears of renewed inflation as a result of ongoing uncertainty in the Middle East, which is likely to push up prices in many energy-related areas.
NIQ’s recent Business Confidence Survey - conducted before the start of the US-Israel war with Iran - found that fewer than a third (31%) of leaders feel optimistic about the future of hospitality over the next 12 months.
“Restaurants’ move back into the black in March is a welcome development after a very challenging start to the year,” says Karl Chessell, director - hospitality operators and food, EMEA at NIQ.
“Nevertheless, many groups remain reliant on new openings and deliveries for real-terms growth, and geopolitical concerns are casting a long shadow over the months ahead.
“Hospitality faces relentless challenges that are not of its own making, and without targeted government support it is likely to be a challenging summer season.”