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Wed 19th Sep 2018 - Brexit anxiety hitting confidence of bosses
Brexit anxiety hitting confidence of industry bosses: Concerns over the impact of Brexit is driving a fall in confidence among the leaders of Britain’s eating and drinking-out sector, the latest CGA Fourth Business Confidence Survey has revealed. The majority (62%) are backing a “soft Brexit” outcome, while more than two thirds (69%) support a second referendum. No other outcome, whether “no deal”, “Chequers” or “hard Brexit”, gained more than 10% support. Just over a third (36%) of the bosses of pub, bar and restaurant groups are optimistic about prospects for the market over the next 12 months – a drop of 11% since the last poll of leaders in May. Two-thirds (67%) remain upbeat about their own businesses’ performance but that has dropped from 75% over the last quarter. In all, 71% said the decision to leave the EU had already had a negative effect on business. Among the nearly three quarters of leaders that said the Brexit vote has already had a negative effect, most cited an increase in the cost of ingredients and the decreased availability of staff. Nine in ten (92%) said the reduced access to kitchen staff has had, or will have, an impact on their business. Leaders indicated challenges are particularly acute in London, where businesses are most heavily dependent on EU nationals for staffing. Leaders identified Brexit-related damage to consumer confidence too, with half (48%) forecasting people’s frequency of eating and drinking out will decrease over the next six months, and only one in ten (9%) expecting it to increase. The survey also revealed some of the steps operators have taken to prepare for Brexit. Three quarters (73%) have anticipated its impacts by investing in staff training and retention, while a quarter (27%) have invested in local food and drink suppliers. But nearly a third of leaders (31%) still consider their business to be under-prepared for Brexit, or not prepared at all. Amid the challenges, the research revealed some grounds for cautious optimism in the sector. More than a quarter of leaders (29%) said their business’ performance had been ahead of expectations, thanks in part to the twin boosts to pubs and bars of the hot weather and the Fifa World Cup. Some bosses also see possible long-term benefits of Brexit, especially if it cuts red tape and reduces non-EU tariffs. CGA chief executive Phil Tate said: “Our Business Leaders’ Survey is the clearest indicator yet of the dramatic impact of Brexit on the hospitality sector. Restaurant, pub and bar operators that are sharply focused on meeting consumers’ needs, offer good value for money and are well differentiated from the competition still have plenty of headroom to grow. But the Business Confidence Survey confirms Brexit is going to bring enormous challenges for the sector into 2019 and beyond.” Fourth chief executive Ben Hood added: “With rising costs – including those associated with employment – a shrinking talent pool and the sector’s heavy reliance on EU workers, the government needs to navigate the complex process of leaving the EU with an approach that supports hospitality employers. Beyond the negotiations, and despite the uncertainty, what we see is an industry rolling up its sleeves to negotiate the challenges ahead.”

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