Hospitality sales flatten in October as cost pressures mount

Great Britain’s hospitality groups experience slowdown as cost pressures continue to rise.

Sales growth for Great Britains’s leading managed hospitality groups reached just 0.6% in October 2024, according to the latest CGA RSM Hospitality Business Tracker. This marks the fourth consecutive month of below-inflation, like-for-like growth, with the Tracker now at its lowest point since April.

The slow sales growth highlights ongoing challenges in the sector, including fragile consumer confidence, rising operational costs, and less-than-ideal weather conditions for much of October. These factors have raised concerns for the crucial Christmas trading period, especially as the government’s recent Budget proposals are set to increase the industry’s tax burden, further complicating the outlook.

Although Halloween typically boosts sales, this year’s celebrations were impacted by the holiday falling on a Thursday, with many businesses seeing the majority of their trading shifted to the following weekend. Tracker data from early November suggests that pubs and bars experienced a stronger start to the month, driven in part by these delayed celebrations.

The Tracker, produced by CGA by NIQ in partnership with RSM UK, shows that total sales growth in October—including new venues opened within the past 12 months—was slightly better, at 2.4%. Managed pubs saw a like-for-like sales growth of 1.5%, while restaurants struggled, with sales dropping by 0.1%.

Bars, in particular, experienced a decline of 4.2% compared to October 2023, reflecting ongoing difficulties in this segment. On-the-go food groups performed best with 4.3% growth, possibly as consumers shifted spending away from sit-down meals.

Karl Chessell, Director – Hospitality Operators and Food, EMEA at CGA by NIQ, commented: “It’s been a challenging autumn for many restaurants, pubs, and bars across Northern Ireland, with real-terms growth still out of reach. The recent Budget, which introduces additional costs through National Insurance contributions, has only exacerbated the pressure on hospitality businesses. Operators are facing a critical Christmas period, and while demand remains solid, the sector is likely to face continued difficulties well into 2025.”

Saxon Moseley, Head of Leisure and Hospitality at RSM UK, added: “October’s weak performance demonstrates that the industry stalled last month. Poor weather and the uncertainty surrounding the Budget are likely to have deterred consumers from going out. While the Budget did not directly increase taxes on consumers, the proposed fiscal changes are set to hit hospitality hard, with hikes in the National Minimum Wage, employers’ NIC, and business rates all set to reduce margins and push some businesses into the red. Looking ahead, operators will have little option but to raise prices, but without a significant boost in consumer confidence, it’s uncertain whether this will lead to better like-for-like sales.”