Rain or Shine, the Struggle Continues: Hospitality Sales Flatline in June

Britain’s hospitality sector closed the first half of 2025 with little cause for celebration, as sales across the nation’s leading pub, bar and restaurant groups remained flat compared to the same month last year. The latest figures from the CGA RSM Hospitality Business Tracker paint a cautious picture of an industry buffeted by unpredictable weather, shifting consumer sentiment, and escalating operating costs.

Despite a promising April driven by warmer temperatures, four of the first six months of the year have now recorded either stagnant or negative sales growth in real terms. June was particularly disappointing, hindered by a mix of unsettled weather conditions and unfavourable year-on-year comparisons with the Euro 2024 men’s football tournament, which had provided a significant uplift to last year’s trading.

Pubs Lead, But Restaurants and Bars Lag

For the sixth consecutive month, managed pub groups outperformed other segments, recording a modest 1.2% increase in like-for-like sales compared to June 2024. However, that uplift was not enough to offset the drag elsewhere. Restaurant trading slipped by 0.5%, and bars extended their troubling downward trend with a 5.7% year-on-year decline. The on-the-go segment also faltered, falling 4%.

London, typically a resilient market, underperformed once again. Sales within the M25 dropped by 1%, while the rest of the country saw a marginal gain of 0.4%. This marks the fifth month out of six in 2025 where trading in the capital lagged behind other regions.

Total sales across all channels — including new venues launched in the past 12 months — were up 2.8% compared to June 2024. However, this growth still lags behind the UK’s Consumer Prices Index, indicating that in real terms, the sector continues to tread water.

Mounting Pressures on Operators

Karl Chessell, Director for Hospitality Operators and Food at CGA by NIQ, summarised the mood succinctly: “June’s numbers round out a tough first half for hospitality groups. They have had to deal with the dual challenges of fragile consumer confidence and a hike in labour costs from April, and with inflation ticking up again, the second half of 2025 may be just as challenging.”

Despite the grim overarching trend, Chessell highlighted “encouraging pockets of growth”, particularly in the pub segment, suggesting that some consumers remain willing to spend where the offer is right. He also pointed to the potential of warmer summer weather to offer a timely reprieve.

Yet optimism remains tempered by stark warnings from industry insiders. Saxon Moseley, Head of Leisure and Hospitality at RSM UK, noted that the combination of declining like-for-like sales and rising operating costs is already taking a toll on the industry’s backbone — established high street brands.

“This damaging combination is leading an increasing number of well-known brands to either appoint restructuring advisers, close sites, or shut the doors completely,” Moseley said.

Looking to the Treasury

The industry’s outlook may hinge on upcoming fiscal decisions. With speculation mounting around potential increases in mandatory employer pension contributions, many operators are calling on the government to take decisive action in the Autumn Budget.

“Labour costs are already at breaking point,” Moseley warned. “Without meaningful intervention from the Treasury, further financial strain could be the final nail in the coffin for many.”

Conclusion: A Sector on the Brink

While parts of the hospitality industry — notably pubs — continue to demonstrate resilience, the overall picture remains challenging. The twin forces of cost inflation and subdued consumer confidence have kept growth at bay, and hopes now rest on a brighter summer and more supportive government policy to steer the sector back on course.