Optimism among business leaders in the eating and drinking sector was at its highest level for nearly four years, according to the CGA’s latest Business Leaders’ Survey.
The poll, run in partnership with hospitality technology specialist Fourth, revealed 60% of senior executives were “optimistic” about prospects for the sector in February.
This marked a 16% increase from the last confidence survey in November, and was the highest level reported since the EU Referendum in 2016. Some 83% of leaders were “confident” about prospects for their own business, a rise of 19% since the last quarter.
However, the business insight consultancy said that while the poll was conducted after Britain’s exit from the EU, it was held “before concerns over coronavirus and the government’s immigration policy hit the market”.
Despite Brexit certainty, the group also said that post-Brexit concerns about workforce availability, costs and future trade tariffs were “still dampening” industry expectations for the year.
Nonetheless, the CGA said that the upswing reflects not only a greater clarity around Brexit, but “renewed optimism” for consumer spending. Leaders who said they were concerned about consumer confidence over the next year fell from 53% in the last survey, to 34% now.
Mike Shipley, VP of analytics at Fourth, said: “Despite an uptick in confidence, an influx of cost headwinds, particularly the cost and supply of labour, not to mention the ongoing coronavirus situation, present a sizeable challenge for the industry to manage over the coming months.”
Karl Chessell, business unit director for food and retail at CGA, said: “The effect of more recent worries, like coronavirus, on business sentiment is yet to be gauged.
“Our monthly sector sales figures for February from the Coffer Peach Business Tracker, which we will be releasing next week, will give us a better idea of the immediate impact coronavirus as well as the recent flooding in the country has had to the eating and drinking out market.”
He added: “Cost pressures are squeezing margins from all directions, and the new immigration proposals are a reminder that the next big challenge for this sector is never far away, be it policy, or indeed volatile consumer confidence in the face of Coronavirus or changeable weather.
“Operators will have to stay vigilant, flexible and resolutely focused on consumer experience if they are to win market share in this ultra-competitive market in 2020, and the survey results suggest that they will.”