Pubs, Bars And Restaurants Optimistic For Their Own Future Despite Challenging Trading Conditions

DiningDespite difficult trading conditions and uncertainty over Brexit, hospitality businesses have seen steady growth in the last 12 months and are positive about the future of their own business, according to a survey from top 25 accountancy firm haysmacintyre.

The 2019 haysmacintyre UK Hospitality Index revealed evidence of resilience in the sector with average turnover growth of respondents broadly consistent with last year at 4.2% (4.7%: 2018) and 90% of respondents optimistic for the future of their own business. However, the view for the wider industry was less upbeat, with only 39% of those questioned positive about the outlook for the sector as whole.

The Index also showed that uncertainty has continued to bite with fears over availability of labour and the overall impact of Brexit among respondents’ top concerns. This year 83% of respondents believe that Brexit will impact negatively on their ability to recruit staff, compared to 77% last year.

Gareth Ogden, partner in the hospitality team at haysmacintyre, comments: “It’s undeniable that conditions have been challenging for the hospitality sector this year. The effect of Brexit on consumer demand and food costs is causing anxiety, but it is the uncertainty over the availability of staff which is having the greatest impact.

“Despite these headwinds, and whilst turnover predictions are still markedly down on the heights of five years ago, we are reassured that much of the data we gathered points to a sector that remains resilient. Pubs, bars and restaurants are constantly improving what they offer customers, and responding positively to changing lifestyle choices and the drive for sustainable practises.”

The survey also highlighted the burden of business rates on hospitality businesses with 80% of respondents calling on the Government for reform of the business rates system.

Gareth Ogden adds: “This year, the tax burden on hospitality businesses was a common concern. Business rates remain a headache and our respondents are making the call for a fundamental reform of what is seen as an unfair system, whilst others are hoping for a reduction in VAT applied on food and drink sales in the sector.”

The haysmacintyre UK Hospitality Index is an annual survey which identifies key issues and challenges preoccupying the sector. In its sixth consecutive year, it studies pubs, bars and restaurants across the UK. Some other key findings are:

Sustainability: pubs, bars and restaurants are embracing sustainability

  • The Index revealed that 81% of respondents have taken concrete steps to improve on sustainability, including: efforts to cut down on single use plastic; reduce energy use; source food more locally and use food waste apps

Delivery models: remain a challenge

  • Over half (52%) of this year’s respondents now use a delivery service compared to 39% last year
  • But only 28% of respondents stated that delivery has a positive impact on profits, and less than half (48%) said it had a positive impact on turnover

Employee costs: continue to rise this year

  • This year’s respondents reported average labour costs as a percentage of turnover of 31% compared to last year’s sample which was 29%
  • The average hourly wage of our respondents was £9.63 compared to £8.96 reported in last year’s survey

Low alcohol drinks: operators responding to healthy lifestyle trend

  • Over two thirds (68%) of respondents saw an increase in demand for low/no alcoholic drinks compared to 57% in 2018
  • 43% of respondents offer customers low/non-alcoholic spirits compared to 20% in 2018
  • 20% of respondents offer customers low/non-alcoholic wine compared to 10% in 2018