February: bar sales down, but pubs up

Bar chains in Britain suffered their second month of declining sales in February, but pubs and restaurants reported growth.

The CGA RSM Hospitality Business Tracker reported that sales for Britain’s bar groups fell by 7.4% in February 2024, compared with the same month in 2023. CGA said this decline reflected a ‘squeeze on consumers’ late-night spending and a move towards earlier eating and drinking out’.

Meanwhile, pub chains posted a 2.1% increase and restaurant groups were up by 2.2%.

January and February are traditionally the quietest months for the hospitality sector, following a typically busy Christmas period.

Bar groups were also the only hospitality segment to decline in January, when sales plunged by 13.6%. CGA attributed the drop in sales to poor weather, rail strikes and drinkers avoiding alcohol.

In total, hospitality groups grew sales by just 1.4% last month, compared with February 2023. It was a minor increase on the 0.1% gain seen in January.

Restaurant, pub, bar and on-the-go operators performed slightly better in London than the rest of Britain. February sales within the M25 were 1.9% ahead of last year, compared to 1.3% outside of the M25.

Sales for Britain’s hospitality groups in December 2023 – the busiest time of the year for the sector – rose by 8.8%. Bar chains reported growth of 5.6% in December.

The CGA Tracker covered bar chains including Adventure Bars, Beds and Bars, Revolution, Simmons, Snug Bar, Rekom and The Alchemist.

‘Disappointingly slow’ start

Karl Chessell, director – hospitality operators and food, Europe, Middle East and Africa, at CGA by NIQ, said: “Subdued trading in February shows consumers remain watchful with their discretionary spending.

“With costs still rising for businesses as well as individuals, margins are under pressure and some operators remain fragile. But while the short-term outlook for hospitality is uncertain, underlying demand is good, and as inflation and interest rates hopefully ease and the budget’s reduction in National Insurance contributions kicks in, we can be cautiously optimistic that people will start to loosen their spending over the spring and summer.”

Paul Newman, head of leisure and hospitality at RSM UK, added that bad weather and shrinking finances “put a dampener on Valentine’s celebrations, continuing a disappointingly slow start to the year”.

He noted that the latest spring budget announcement on 13 March did little to help the hospitality sector as it deals with rising wages, rents and business rates.

Newman warned smaller firms could face closure in the coming months: “While there are signs for optimism in the future with inflation forecast to hit 2% in Q2 [second quarter], interest rates predicted to fall from summer and real wages growing for the rest of the year, the next few months will test many best-in-class managed groups and could see a further swathe of smaller independents give up the fight for survival.”