Just over a third (35%) of business leaders polled feel optimistic about prospects for their business over the next 12 months, the latest Business Confidence Survey from NIQ and Zonal shows, a drop of two percentage points from its last survey in May and a 16 percentage points fall since the start of the year.
The number of leaders feeling optimistic about the future of hospitality in general is virtually flat quarter-on-quarter at 21%.
While the men’s football World Cup boosted sales at pubs and bars across the country during part of the summer, 41% of leaders reported that their footfall had declined recently, compared to 34% who said it had increased, with the heat wave thought to have put some customers offer eating and drinking out.
Some 41% of respondents said that their quarterly revenue had increased year-on-year, despite higher prices in most venues. While just over half (52%) said either that their profitability had dropped, or that their business was currently running at a loss or unviable.
Confidence levels were greater when asked about how hopeful leaders were that new Prime Minister Andy Burnham would offer support for the sector with nearly half (47%) of leaders saying they were optimistic that the leadership change will benefit hospitality. However, 26% expressed pessimism over the change at the top of Government.
The high cost of labour and rises in utility costs over the past three months were of the biggest concerns to business leaders followed by food and drink inflation and VAT.
“The World Cup and hot weather should have boosted hospitality this summer, but any benefits have been outweighed by relentless challenges,” says Karl Chessell, director - hospitality operators and food, EMEA at NIQ.
“Falling visits and rising costs are a hugely damaging combination and it is no surprise to see that leaders’ confidence is running so low – especially among smaller businesses. With conflicts and the climate fuelling market volatility, there is little respite in sight on inflation.”