Turnover stalls as overall inflation sees drop but not in food and drink

The UKHospitality Quarterly Tracker, in association with CGA, shows that the revenue generated in the last 12 months is 4.1% above generated pre-pandemic, demonstrating strong consumer demand but still falling significantly below the ‘like-for-like’ sales required to keep up with inflation.

The tracker also shows that the sector’s turnover contracted by 0.3% in Q1 this year, compared to Q1 in 2022.

UKHospitality Chief Executive Kate Nicholls said, “Unfortunately, these figures no longer come as a surprise and simply reinforce the chronic nature of the pressure hospitality is under due to inflation.

“Despite consumer demand remaining strong and revenue being up on 2019, businesses are simply nowhere near able to keep up with the cost pressures they’re facing across energy, food and drink.

“Even more concerning is that our fears that this endless pressure would cause the sector to contract are starting to be realised, with turnover contracting in the first quarter of this year.

“While it’s marginal at the moment, we want to stem that bleeding, so support from Government is essential. Energy remains the single biggest cost to businesses and direction to energy suppliers from Ofgem and the Government to renegotiate the highest contracts is an essential starting point.”

Responding to today’s inflation figures, which sees the Consumer Prices Index (CPI) at 8.7% in the 12 months to April 2023, down from 10.1% in March, Kate Nicholls said, “It’s encouraging that we have seen a more substantial drop in the overall rate of inflation, but it is worrying that food and drink inflation remains stubbornly high.

“This continued inflationary pressure shows there is a long way to go in this crisis yet. Food and drink are part of the core hospitality offering and it is becoming impossible for many to continue to absorb these costs.

“Sharp drops in energy, food and drink costs are urgently needed for businesses to remain viable and continue to serve communities across the country, create jobs and drive economic growth.”


Category: News
Tags: CGA, Consumer Prices Index, inflation, Kate Nicholls, UKHospitality, UKHospitality Quarterly Tracker