Andrew Ball

Increasing pub closures show impact of cost increases Read More Here: https://lnkd.in/ewZcnxiz #lardernews #pub #costincreases #hospitality #lardermagazine

Hospitality Insolvencies Fall But Operators Aren’t In The Clear Yet Today’s company insolvency statistics show accommodation and food service insolvencies decreased by 17% in March 2024 (to 280, from 338 in February) and were also down 17% from March 2023 (339). Saxon Moseley, head of leisure and hospitality at RSM UK, comments: “The hospitality industry has been in the doldrums since 2022, primarily driven by soaring overheads and reduced demand. Last month’s dip in company failures shows the tide may be turning as consumer confidence returns. This brings hope that the second half of the year will show a continued improvement, with interest rates and inflation both expected to fall, which should ease cost pressures on businesses and put more money in consumers’ pockets.” Gordon Thomson, restructuring partner at RSM UK, added: “Despite these positive indicators and the likely boon of the European football championships, the trading environment remains turbulent and continued cost pressures continue to plague the industry. With many businesses operating with less than three months of working capital, it is essential that management teams focus on delivering lean operations, while optimising the experience to attract discerning customers.” Read More:

Hoteliers Want Show of Support Ahead of General Election Hoteliers in Bristol say politicians who want their votes in next month’s General Election need to show significant more support for the hospitality sector. After the autumn statement and spring budget left the sector feeling very let down, the Bristol Hoteliers Association (BHA) is urging those hoping to form part of the next Government to back their businesses. BHA Chair Raphael Herzog said: “Ever since the pandemic, we’ve been backing the trade body UKHospitality in its calls for a reduced rate of VAT for our businesses, which would bring many benefits. “When people cast their votes on 4 July, they want to elect people who will listen, and who will then want to act based on what they hear. “For too long, the pleas from our sector have fallen on deaf ears. Over the coming weeks, we want to hear strong voices talk about how they would support our sector in the new Parliament. “If they won’t listen to us, perhaps they should listen to their peers; the All-Party Parliamentary Group (APPG) for Hospitality and Tourism backed UKHospitality’s calls for VAT to be reduced to 12.5%. “If they won’t listen to their peers, perhaps they will listen to the public! A YouGov study, commissioned by UKHospitality, found that 79% of the public favoured a reduced rate of VAT for hospitality and tourism.” He added: “The UK has one of the highest rates of VAT in Europe. “During the pandemic, lower rates of VAT were introduced, and had a positive impact, stimulating demand and generating revenue. “Lower VAT will enable us to make our services more affordable to the public, saving them when they eat or drink out, visit an attraction or book a break. “The impact of the pandemic, a labour shortage caused, in no small part, by Brexit, soaring supply and energy prices and increases in the National Living Wage have all put tremendous pressure on our businesses. “A lower rate of VAT would help the hospitality sector cope with all these costs and could provide the boost that could prevent even more businesses in our industry from closing down. “The APPG concluded that a lower rate of VAT for hospitality and tourism could help ease the cost of living pressure, improve employment opportunities, support regional growth and even improve social wellbeing. “If people haven’t made up their minds about who they are going to vote for next month, perhaps they might consider the issues we are facing, and listen to see which political parties are prepared to take positive steps to support us. “That’s what we are waiting to hear, and that is what is likely to win our votes!” Mr Herzog has been actively engaging with UKHospitality as it continues to campaign tirelessly for more support for the sector. Read More:

Hospitality Ready To Invest And Grow, But Rising Costs Remain A Barrier A joint survey by UKHospitality, the British Beer & Pub Association, Hospitality Ulster and the British Institute of Innkeeping showed that pubs and hospitality venues have the appetite to invest in the future of their businesses, despite the wide range of cost pressures they continue to face. The survey revealed the clear desire from businesses to invest, both in development and training of their teams, and in venue refurbishments and improvements, but it also showed the challenges around rising wage bills, food and drink costs and disproportionately high taxation in relation to other sectors. Despite these pressures, 95% of operators are planning to invest in customer service, 92% in staff training, and 71% in venue refurbishments, all up significantly on last quarter. Research from CGA by NIQ revealed venue closures have slowed in recent months and despite the cost-of-living crisis, consumers are prioritising visiting hospitality venues as an “affordable treat” that they “most look forward to”. At a time when people are thinking carefully about spending their money, hospitality remains key to unlocking the growth that is lacking in the UK economy at present. As the UK’s third largest employer, the hospitality sector has the power and agility to act quickly and be part of this much needed growth, but it desperately need confidence that any increased trading will be converted into profit, before they will invest further. When comparing Q1 2024 to Q1 2023: - Despite more than 33% of operators seeing an increase in revenues, 70% of venues have seen a reduction in profit, with nearly 50% of venues operating at a loss or just breaking even. - One-in-four businesses still remain completely exposed, having no cash reserves, with nearly one-in-two having six months or less. - 66% of businesses now have significantly increased wage costs. In a joint statement, the trade bodies said: “Our regular survey of our joint memberships showed the resilience of our sector, as well as an appetite to invest in teams and venues for the future. Consumers choosing to spend their disposable income in pubs, restaurants, hotels, and cafes is no surprise, as we provide a much-needed opportunity for fun, celebration and vital social connection, but in order for our members to survive and thrive, they need to be profitable. “Their profitability has been heavily impacted by high inflation in food and drink, high energy costs, disruption from rail strikes and the impact of increased labour costs, that have had a ripple effect at every level. “The sector is innovative, adaptable and has the potential to provide much needed growth for the economy, creating vital local employment and bolstering local supply chains, all whilst supporting essential social connection in high streets, towns and cities. In order for operators to invest in this potential, however, the sector also needs a fairer, mo…

Hospitality Groups Beat Mixed Weather And Inflation With 3.6% Growth Britain’s leading hospitality groups achieved year-on-year sales growth of 3.6% in May 2024 despite disappointing weather in many parts of Britain, the latest CGA RSM Hospitality Business Tracker reveals. It is a quick return to growth after a 1.7% drop in trading in April, which followed six consecutive months of positive numbers. May’s figure is also comfortably above the current rate of inflation, as measured by the Consumer Prices Index. An easing of some household bills, along with two Bank Holiday weekends, provided a welcome boost to consumer spending during the month. The Tracker—produced by CGA by NIQ in partnership with RSM UK—shows year-on-year growth was highest in the pub sector at 4.4%, while restaurants achieved 3.8%. Bars saw a 2.7% drop, though this is a substantial improvement on April’s figure. The on-the-go segment was 1.6% down. For the fifth time in six months, hospitality groups performed better in London than elsewhere in Britain. May sales were 4.1% ahead of last year inside the M25, while increasing by 3.5% beyond it. Karl Chessell, director – hospitality operators and food, EMEA at CGA by NIQ, said: “May brought a relief to return to above-inflation growth in hospitality after a blip of negative numbers in April. Wet and cool weather continues to work against pub operators, but they and restaurants may be starting to feel the benefit of a relaxation of spending among some consumers, especially over occasions like Bank Holiday weekends. Bars and on-the-go sites are meanwhile still some way short of where they could be. The General Election and greater economic certainty may help to unlock further spending, but operators will be hoping above all for much brighter summer weather to tempt people out of home.” Saxon Moseley head of leisure and hospitality at RSM UK, said: “A return to growth in May is welcome news but the sluggish gains since April’s minimum wage increase means that many operators will be struggling to absorb this additional overhead. As rainy weather and delayed interest rate cuts continue to weigh on the recovery of consumer confidence, pressure will be mounting on whoever is elected in July to offer much needed support to the sector, with rates reform, reduced VAT and better access to skilled workers high on the wish list.” Read More: