​Bars See Decline as Pubs and Restaurants Show Resilience in August

Recent data from the CGA RSM Hospitality Business Tracker reveals that the UK's hospitality sector experienced a modest 1.3% year-on-year sales growth in August 2024. The tracker, which compiles data from over 100 managed hospitality groups such as Azzurri Group, D&D London, MJMK Restaurants, and Young's, indicates tentative signs of recovery, albeit at a pace below inflation.

While hospitality businesses have seen consistent like-for-like growth each month of the year—April being the only exception—the August figures highlight a second consecutive month where growth failed to keep pace with inflation. Despite the overall growth, different segments of the hospitality industry performed unevenly.

Pubs emerged as the top performers within the sector, achieving a 2.9% increase in year-on-year sales, outperforming restaurants and bars. Though showing some resilience, restaurants posted only a modest 0.8% rise. Bars, however, faced a sharp 9% decline in sales, further highlighting the uneven recovery within the industry.

Karl Chessell, director of hospitality operators and food at CGA by NIQ, offered his perspective on the findings: "August's figures complete a modest summer for hospitality groups. With the weather and consumer confidence remaining lukewarm, real-terms growth has been difficult to achieve. Pubs have benefitted from a shift in consumer behaviour, particularly due to cooler weather affecting beer gardens and terraces."

Chessell also emphasised that while consumers are still inclined to dine and drink out when possible, operators across the sector hope for a stronger showing as the final quarter of 2024 approaches, a critical period for the industry.

Saxon Moseley, head of leisure and hospitality at RSM UK, echoed these concerns. He noted that after a lacklustre summer, the industry will look to the upcoming Autumn Budget, scheduled for Wednesday, 30 October, for further government support. Moseley pointed to key areas where the sector could benefit, including business rates reform, a reduction in VAT to match European standards, and a decrease in employer national insurance contributions to ease the pressure from rising wages.

As the UK's hospitality sector continues to navigate a challenging economic landscape, operators will watch the government's actions closely, hoping for policies that could bolster recovery as the crucial holiday season approaches.