Business confidence among the leaders of Britain’s pub and restaurant groups has taken a hit amid fears about the long-term impact of Brexit—pushing market optimism to its lowest ebb for two years.
The downturn is revealed in the latest quarterly Business Confidence Survey from CGA, the sector’s leading insight consultancy, in association with hospitality technology specialist Fourth. It indicates that fewer than a third (30%) of industry bosses are currently optimistic about prospects for the general market—down by nine percentage points on the last survey three months ago. The figure is the lowest since November 2017, and the joint lowest since the EU Referendum of June 2016.
Operators’ confidence in their own businesses has also dipped in recent months, the survey shows. A little more than half (58%) of leaders are now optimistic about their firm’s prospects in the next 12 months—down seven percentage points from the last poll, to the lowest point since late 2017.
The Business Confidence Survey spotlights Brexit as the overwhelming source of pessimism, and reveals that leaders are concerned about the long-term as well as immediate impacts of leaving the EU. Although 44% said uncertainty around Brexit was their leading concern, more (52%) cited the potential consequences of departure as their biggest worry.
Three quarters (74%) of leaders say they are concerned about increased food costs post-Brexit, and nearly as many are worried about increased labour costs (72%) and a fall in consumer confidence (67%).
“This is a sober message to the Government from the country’s pub, bar and restaurant operators,” said CGA group chief executive Phil Tate. “It is clear that the long-term consequences of Brexit are front of mind in the industry at the moment, and leaders don’t regard this as simply a short-term problem. There is an urgent need for clarity around Brexit’s impact in areas like imports and the labour market, and this sector deserves support that reflects its enormous contribution to the UK’s economy.”
Ben Hood, CEO of Fourth, said: “In an industry known for its positivity, energy and a can-do-will-do culture, our latest leaders’ survey is telling. Brexit, and the prevailing uncertainty, is clearly and understandably weighing on the sector. Against the spectre of a ‘No Deal’ exit, hospitality operators desperately need certainty over the future shape of supply, trading and immigration arrangements with the EU. With consumer confidence starting to tick down as well, these findings should sound the alarm in Westminster that Britain’s resilient, dynamic and world-class hospitality sector needs government to deliver clarity and a workable departure that protects our best interests.”
The CGA Fourth Business Confidence Survey is based on responses from around 130 leaders working at CEO, MD, Chairman, Director or other senior management level. The survey was carried out in August 2019.