While 63% —slightly down from the last poll in July— are optimistic about their own businesses’ prospects for next 12 months, just 39% are upbeat about the market as a whole over the same period.
The exclusive poll of senior executives from across the pub, bar and restaurant sector, from big corporates to entrepreneurial start-ups, shows that confidence levels have shifted only a few percentage points over the year.
Market optimism has moved from 34% in February to 36% in July and 39% last month, following a temporary jump to 47% in May. However, the number of leaders confident in their own company’s prospects has actually slipped slightly from 64% in February and 69% in July to 63% now, despite the fact that last month more than three quarters said they had traded ahead of or in line with their expectations in the last six months.
“This simply reflects the volatility and uncertainty in the market,” said CGA group chief executive Phil Tate. “This quarterly survey, conducted in November 2018, shows that operators are getting on with business, focusing on improving service and customer experience, as well as increasingly embracing trends in healthy eating and sustainability.”
More than a third (38%) of leaders report that their performance over the last six months had been ahead of their expectations—a rise of nine percentage points from three months earlier. A similar number (39%) say they have traded in line with expectations, with less than a quarter (23%) trading below expectations.
But there is pessimism about footfall in 2019, with half (50%) of leaders predicting a decrease in consumers’ frequency of eating and drinking out, and only one in 20 (5%) expecting a rise. The downbeat assessment comes amid growing concerns about the impact of Brexit on consumer confidence.
CGA’s Phil Tate said: “Our latest CGA Business Confidence Survey reflects a complex and mixed picture in the market at the moment. Many businesses continue to find conditions extremely challenging, and confidence clearly remains fragile as the year ends. Christmas trading will now have an enormous impact on the levels of optimism as we enter 2019.”
The Business Confidence Survey also reveals that more than two thirds (69%) of drink-led companies now feel optimistic about prospects for their business—more than their counterparts in food-led businesses (63%). It follows a strong period of trading for drink-led pubs, whose recent sales growth as measured by CGA’s Coffer Peach Business Tracker has been significantly higher than that of restaurants.
The new survey also reveals:
- Service and the quality of consumers’ experience are leaders’ two most important priorities at the moment—ahead of food quality and value for money
- Operators are embracing the trend for healthier eating, with more than half (55%) indicating that healthy options have increased in importance for them
- Sustainability is a growing priority, with half (50%) of leaders saying their business has dedicated more time to the issue over the last year.
Tate added: “Many drinks-led pub businesses are clearly buoyant at the moment, riding high on the hot summer and football World Cup and anticipating a strong festive period. However, our Survey shows that they, like all operators, will need to stay resolutely focused on the consumer next year—supplying not just good food and drink but embracing key trends and delivering the high-quality all-round experiences that guests now demand.”
Ben Hood, CEO of Fourth, said: “Despite the lingering uncertainty of Brexit, the results do show the confidence of hospitality operators remains steady as they prepare for the year ahead. To manoeuvre through this tough period of rising costs, operators are rightly harnessing the power of technology to support most, if not all, aspects of their businesses. However, this is creating a complex digital infrastructure, with multiple logins and technologies working independently. The big challenge the industry now faces – operators and their lead tech partners – is to work together to bring myriad digital business systems into a single, integrated and coherent platform, and our focus for 12 months is to continue to support our operators and to work collaboratively with our fellow technology providers to deliver this.”
The CGA Fourth Business Confidence Survey is produced in partnership with Fourth and is based on responses from more than 127 leading figures from the industry, all working at CEO, MD, chairman, board and senior management levels.