Inflation biting as hospitality sales lag behind pre-pandemic levels

The latest Q3 2022 sales data shows the sector’s sales are 13% below where they should be in real terms to keep up with inflation.

According to data in the latest UKHospitality Tracker, provided by CGA by NielsenIQ, turnover in the year up to the end of September 2022 was up 1.3% at £135 billion, compared to 2019. This is the first time a full-year figure is above pre-COVID-19 levels.


However, the severe impact of inflation means that even a slight year-on-year increase in turnover is wiped out by rising energy, food and labour costs.


Based on these figures, the hospitality sector would have to generate an additional £17 billion of turnover just to rise in line with inflation.


UKHospitality Chief Executive Kate Nicholls said: “These figures are a stark reminder of the challenge facing our sector. The sector’s sales finally rising above pre-pandemic levels should be a cause for celebration but the scale of inflation means it’s actually a warning sign of just how perilous a position hospitality is in.


“Catching up to these levels of inflation will be almost impossible for businesses, as they grapple with rising costs and dampening consumer confidence as a result of the cost-of-living crisis.


“On a positive note, the data does show that hospitality is capable of returning to pre-pandemic levels, even in these challenging circumstances, and that the nation still hugely values the role it plays in our culture and society.


“That demonstrates the importance of hospitality maintaining its inclusion in the Government’s energy relief package post-April to help it weather this storm, in order to deliver the economic growth I’m confident it can achieve.”


The UKHospitality Quarterly Tracker is compiled by CGA by NielsenIQ and based on its Trading Index and OPM data on food and drink sales across the on-trade. It is combined with hotel data supplied by STR and information provided by many leading hospitality and contract-catering businesses.

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