Britain’s leading restaurant, pub and bar groups delivered fractional like-for-like sales growth of just 0.1% in February, according to the latest CGA RSM Hospitality Business Tracker.
The figure is well below the current rate of inflation and continues a challenging start to 2025 for the sector, following a year-on-year drop of 1.3% in January. It indicates that many consumers continue to remain watchful of their disposable income.
The Tracker shows February delivered 2.5% growth in total sales, including all venues opened by groups in the last 12 months. However, with key costs still inflationary — including via extra National Insurance contributions from April — margins in hospitality remain extremely tight.
Pubs performed the best of the major hospitality channels in the Tracker for the third month in a row. Like-for-like sales finished 1.7% ahead of February 2024, having been partly boosted by the start of the Six Nations rugby tournament. Bars continued a long-term drop in growth, with like-for-like sales down by 7.9% in February.
Hospitality had a slightly tougher month in London than elsewhere, the Tracker shows. Groups’ sales inside the M25 were down by 1.2% year on year, but beyond the M25 they recorded a marginal rise of 0.5%.
“After a flurry of spending over Christmas, it’s clearly been a challenging start to 2025 for the hospitality sector,” said Karl Chessell, director, hospitality operators and food, EMEA, at CGA by NIQ. “Growth is very fragile, and hikes in National Insurance contributions will pile even more pressure on managed groups.
‘A final opportunity for government to support the sector’
“We remain optimistic that spending will start to loosen, and brighter weather and big occasions like St Patrick’s Day, Mother’s Day, and Easter should help to rally sales. Nevertheless, real-terms growth will remain hard earned for the foreseeable future.”
Saxon Moseley, head of leisure and hospitality at RSM UK, added: “A second month of lacklustre trading results means that the hospitality sector remains in negative territory for the year to date. Consumers are opting to cut back on discretionary spending amidst growing apprehension about the UK economy and global instability.
“While the medium-term outlook appears more positive, the coming months will be critical for businesses grappling with both waning demand and rising costs.
“Next week’s Spring Statement represents a final opportunity for the government to support the sector through this challenging period, with a phased introduction of National Insurance increases and a delay to implementing the Employment Rights Act high on operators’ wish lists.”
