UKHospitality has issued a cautionary statement, highlighting that the inflationary pressures are making it exceedingly challenging for hospitality businesses to keep pace with escalating operating costs.
The latest UKHospitality Quarterly Sales Tracker reveals a 6.7% increase in turnover over the past year, amounting to £137 billion. Nonetheless, when factoring in inflation since 2019, this growth appears notably diminished, lagging by nearly 20% in real terms.
The tracker also indicates a 2.3% rise in sales over the past year compared to the pre-pandemic period. Nevertheless, there is a marginal year-on-year decline of 0.2% in the quarterly growth rate.
Kate Nicholls, Chief Executive of UKHospitality, commented:
"These figures illustrate precisely the challenge facing hospitality businesses across the board.
Demand is good and sales are strong but the rate of inflation means it's near impossible for venues to keep up with the cost of doing business.
The persistently high costs of energy, food and drink means the task of keeping up with inflation is getting harder with every passing day.
It has been clear for a long time that these rising costs need to be tackled at source to properly bring down inflation, but we also need to ensure new costs aren't tacked on in the future.
The standout threat to the sector in the near future is the double whammy removal of business rates relief and an inflation-linked rise to rates.
That needs to be avoided at all costs, with a commitment to maintaining relief and avoiding an inflation-linked rise, to give the sector a fighting chance of keeping up with inflation."