The October Business Confidence Survey shows that just 8% of multi-site leaders feel confident about the next 12 months for the eating and drinking out market. This is a decline from previous surveys where the percentage was 23% in June and 65% in March.
Karl Chessell, CGA’s director- hospitality operators and food, EMEA, said: “Hospitality businesses have shown remarkable resilience since the start of the pandemic, but these figures show they are facing their greatest challenges yet.
“With no sign of relief on inflationary pressures for firms and consumers alike, sales and margins will be under severe strain and thousands of companies are now vulnerable. Political upheaval and market shocks have only made things worse, and urgent and targeted Government support is needed to sustain the sector through this very difficult period.”
The proportion of leaders feeling confident about prospects for their own business over the next 12 months was higher at 29%. According to the survey 86% of leaders are experiencing inflation in the prices of both energy and food, with challenges deepened by a shortage of staff in hospitality.
While four in five (80%) leaders say their business is still operating at a profit, more than half (53%) report margins lower than they were before the Covid-19 pandemic. One in eight (13%) expects their business to be either running at a loss or unviable by the end of 2022.
Sebastien Sepierre, managing director – EMEA, Fourth, added: “There can be no denying that the hospitality landscape is in a delicate state at present, as reflected by the data outlined in this survey.
“Sector businesses are currently facing myriad challenges, including 40-year high inflation, spiralling energy costs, instability in the markets and an understandably cautious consumer base. Wider support is needed now, as without it, sector confidence will remain low, and much of the industry will simply be unable to weather the storm in the months ahead.”