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Costs crisis wipes out hospitality's growth despite an increase in October sales

However, with inflation now in double digits, sales are significantly behind 2021 and 2019 in real terms, despite a 4.3% sales growth from October 2019.

Pubs performed strongest in October, with year-on-year sales growth of 6.4%. Restaurants endured a tough month with like-for-like sales down by 3.6% on October 2021, while bars’ sales slipped 12.7%.

London’s hospitality sector continued its recent rebound from more than two years of Covid-related upheaval, as tourists and workers steadily returned to the capital. 

• READ MORE: Hospitality sales climb 4% in top UK cities as Manchester tops rankings
  

October sales within the M25 finished 6.4% ahead year-on-year, in sharp contrast to regions beyond the M25, where like-for-likes were up by only 0.3% from October 2021.

Karl Chessell, director at CGA, said: “It’s been encouraging to see hospitality sales running ahead of pre-Covid levels for nearly all of 2022. But after adjusting for the effect of higher prices it’s clear that footfall is down, and inflation means sales are even further behind in real terms. 

“Sustained increases in energy, food, property and other costs are putting a very tight squeeze on both consumers’ discretionary spending and operators’ profits, especially in restaurants. The sector must now pin hopes on a strong festive season to make up some of the growth that has been lost over a variety of unprecedented challenges.”

Mark Sheehan, MD at Coffer Corporate Leisure, added: “There is a continuing sense that sales are on the increase, certainly in city centres. Whilst these numbers are not positive in the context of inflation they are at least improving in real terms. There is a sense, particularly in London, and notwithstanding strikes, that trade is returning steadily.”

• CGA
• Mark Sheehan
• Coffer Corporate Leisure