Managed group sales remain flat in May as cost crisis deepens

Sales remained flat for Britain’s managed restaurant, pub and bar groups in May as like-for-like sales were just 0.1% ahead of the pre-Covid levels of 2019, the latest Coffer CGA Business Tracker revealed. This follows like-for-like growth of between 2% and 4% from February to April. However, sales are “significantly” behind pre-pandemic levels in real terms due to high levels of inflation since 2019. Overall, restaurants recorded growth of 2% in May, while pubs were down 1% and bars were flat. Meanwhile, trading in London improved in the month, with like-for-like sales flat within the M25 as more workers and tourists returned to the capital. Sales outside the M25, which were “well ahead” of London for the first four months of the year, were also reportedly flat. CGA said this is a sign of a tightening squeeze on consumers’ spending in many regions. The Tracker also found that operators currently rely on delivery for sales growth. Dine-in only sales across all managed groups were 3% lower than in May 2019, while the CGA and Slerp Hospitality at Home Tracker found that delivery sales have been four times higher than pre-COVID levels in recent months. However, comparisons are affected by the absence of the traditional late May Bank Holiday in 2022 after it was moved to June for the Queen’s Platinum Jubilee, which reportedly weakened trading against May 2019, which included two Bank Holiday Mondays. Karl Chessell, CGA director of hospitality operators and food for EMEA, said: “Rising costs in many areas are clearly tightening the squeeze on both operators’ profit margins and consumers’ discretionary spending. These all highlight that a number of challenges are likely to remain for the rest of 2022.” Mark Sheehan, managing director at Coffer Corporate Leisure, added: “June however should see a bounce with the jubilee and warmer weather and operators are optimistic for strong sales across the summer. The focus though is on staffing and rising costs. The issues with recruitment remain a critical problem for the hospitality sector.” Paul Newman, head of leisure and hospitality at RSM UK, said: “It’s great to see London coming back to life with sales finally returning to a level not seen since the start of the pandemic, although the ability of operators to take advantage of this increased demand continues to be curtailed by significant staff shortages.”