The exclusive poll from the start of the third quarter found just 26% of leaders feel optimistic about prospects for their business over the next 12 months—a dramatic drop of 15 percentage points from the second quarter of 2025. The number of leaders feeling optimistic about the future of hospitality in general slipped by 5 percentage points to 13%.
It brings an abrupt end to two consecutive quarter-on-quarter increases in the tracker in 2025. Leaders’ confidence in prospects for their business is now at its lowest point since October 2020, when the COVID-19 pandemic had decimated trading.
The latest figures are a concerning indictor as pubs, bars and restaurants enter the crucial Christmas and New Year period. They also highlight the urgent need for targeted and sustained support in the Chancellor’s forthcoming Budget.
Sales and profits squeezed as hospitality polarises
The Business Confidence Survey from CGA by NIQ and Sona shows heavy pressure on operators’ sales and profit margins throughout 2025. While 46% of business leaders report a year-on-year increase in their revenue in the third quarter, this is sharply down from 53% in the second quarter. The majority of leaders report either decreased (25%) or unchanged revenue (29%).
The CGA RSM Hospitality Business Tracker—based on a separate sample of hospitality businesses—has indicated broadly flat sales on a like-for-like basis in 2025. Openings of new sites have generated modest total growth, though it has remained below the rate of inflation for most of the year.
Profits have meanwhile been squeezed even tighter than sales. A third (32%) of leaders say their profits have decreased year-on-year—more than the 30% who recorded an increase. Even more concerning is the finding that 11% of leaders operated at a loss in the third quarter of 2025. With many companies’ financial resources drained, only a quarter (26%) now hold enough cash reserves to last them a year—the lowest level in years—while 6% hold no reserves at all.
Tough decisions on menu prices, staffing and investment
Sustained challenges are forcing hospitality business leaders into difficult decisions in many areas, the Business Confidence Survey shows. They include menus, with the large majority (85%) of operators raising their prices since measures in the government’s Spring Statement added to the sector’s costs. The average increase in prices is 7.6%—almost double the rate of inflation.
Many leaders have also been obliged to address staffing levels, with more than half (55%) reducing their team numbers and / or the hours available to their staff. The average reduction in hours is 7.3%. Smaller numbers have lowered their spending on employee benefits (23%) and training (19%).
The costs crisis is leading some businesses to retrench in many more ways, including cancellations of investment (53%), reductions in trading hours (36%) and closing sites entirely (21%).
Leaders call for Budget support
The latest problems for leaders add weight to calls for greater government support for the hospitality sector, with taxes, rates and labour costs the three urgent priorities. Around two thirds of leaders say a VAT reduction for hospitality (70%), a maximum possible discount on rates multipliers (65%) and changes to employers’ National Insurance contributions (65%) are among their three most preferred actions from government. Without more support, the majority of leaders say they would have to cancel investment (69%), increase prices (63%) or make further cuts to staff hours (63%).
Karl Chessell, director – hospitality operators and food, EMEA at CGA by NIQ, said: “The latest dip in leaders’ confidence reflects the exceptionally challenging environment they have faced in 2025. High inflation, low consumer confidence and government policy have all combined to weaken hospitality and compromise its immense contribution to the UK’s economic growth and job creation. Christmas trading will hopefully boost the coffers of vulnerable businesses, but the sector will be hoping that the imminent Budget is used to deliver the targeted support that hospitality needs and merits.”
Paul Watson, VP of hospitality at Sona, said: “This sharp drop in leaders’ confidence underlines just how tough trading conditions have become. Operators are facing mounting pressures on all sides, and the temptation to cut back on hours, teams or investment is completely understandable. But when margins are already tight, every peak period becomes even more valuable – and without the right people in place, those vital revenue moments can slip away. Guests are also being more selective with their spending, so having a confident, supported and consistent team is crucial to delivering the experiences that keep them coming back. The next few months will demand a careful balance: managing costs sensibly while ensuring teams have the tools, insight and stability they need to perform at their best.”
The Business Confidence Survey from CGA by NIQ and Sona drew responses from leaders at CEO, MD, chair, board and other senior management levels, with combined oversight of more than 13,100 hospitality sites. The research was conducted in October 2025.
Click here to download the latest Business Confidence Survey report in full, and contact the CGA by NIQ team to learn more.
