Hopes of an uplift in tourism and a potential brake on spiraling rental and property costs has helped cushion the blow of the ‘leave’ vote in the European referendum for many London-based restaurant, pub and bar group bosses, exclusive research by CGA Peach reveals.
The survey of 80 board-level directors across Britain shows that optimism about the market as a whole has tumbled since the beginning of the year. Just 15% of operators nationally are upbeat about market prospects in the next six months, down from the 75% that registered market optimism in January.
However, London-based operators have emerged more upbeat than their peers trading outside the M25, with 26% optimistic for the short term, and almost half(48%) confident about the coming two years, against 29% nationally.
Although expectations overall are depressed, operators in the capital are more likely to see benefits from tourism and falling property costs. Just under half (48%) of London-based business leaders think that there will be an increase in tourism thanks to the EU referendum, driven by the falling pound, with 39% predicting a positive long-term benefit in the form of a decrease in property and rental costs.
“When it comes to their own business predictions, 34% are optimistic in the short term, while 48% are optimistic in the longer term, figures which are higher than the 28% and 36% respectively for the market nationally,” said Charlie Mitchell, head of consumer research at CGA Peach’s parent company, CGA Strategy.
For the market as a whole, the most cited concerns for the out-of-home market following the decision to leave the EU are:
· Increase in the cost of raw materials/ingredients (76% agreeing)
· Drop in consumer confidence (74%)
· Decreased staff availability (73%)
· Falling of the pound (71%)
· A skills shortage in the out of home market (69%)
“The availability of people is the number one long-term worry, but perhaps surprisingly London operators, who might be expected to be most affected by uncertainty around EU nationals working in hospitality, are no more concerned than the country as a whole. Nevertheless it remains a major worry and the area the market will be looking for reassurances on from the Government,” added Mitchell.