Tourism and recreation businesses see growth slow as sector braces for weaker consumer demand: Tourism and recreation businesses, which includes pubs and restaurants, continued to benefit from the relaxation of covid-19 restrictions in April, according to the Lloyds Bank UK Sector Tracker. The sector posted its third consecutive month of output growth, with firms recording the second fastest rate of growth (65.0) of all 14 UK sectors monitored by the tracker in April. However, there were early indications that inflation has started to erode purchasing power and dampen consumer demand, threatening the outlook for the sector. The sector’s pace of output growth slowed month-on-month as firms reported a moderation in new business activity for the second month in a row (56.6 in April versus 63.6 in March and 64.5 in February). A reading above 50 on the tracker indicates expansion, while a reading below 50 indicates contraction. Tourism and leisure firms reported an unprecedented rise in input costs in April, driven by higher transportation, material, energy and salary expenditure. The sector registered 91.4 on the tracker’s input price index – the sharpest rate of cost inflation in 24 years of the tracker’s underlying data. Against this backdrop, almost two-thirds (63%) of firms raised prices charged to customers, leading the sector to post a record 72.9 on the tracker’s prices charged index. The gap between the tracker’s input price and prices charged indices narrowed to 18.5 points (versus 18.8 in March), suggesting that margin pressures eased slightly. However, the difference remained more than twice the pre-pandemic average, underlining a continued squeeze on profitability.

Delivery sales more than four times higher than pre-covid but growth eases in 2022, account for a quarter of spending: Delivery sales at Britain’s leading managed restaurant and pub groups in April were 357% higher than the pre-covid levels of April 2019, the latest edition of the CGA & Slerp Hospitality at Home Tracker showed. Takeaway and click-and-collect sales have also increased over the last three years, though by a much more modest rate of 26%. Combined sales of deliveries and takeaways were 114% higher than in April 2019. They accounted for around 24p in every pound spent with the managed groups participating in the tracker. However, sales have plateaued in 2022, as covid-19 restrictions eased and consumer confidence about eating-out improved. The tracker showed April’s delivery and takeaway sales were 34% below the levels of April 2021, when Britain was emerging from strict covid-19 restrictions and venues were starting to reopen. Karl Chessell, CGA’s business unit director – hospitality operators and food, EMEA, said: “While growth in sales have slowed from the peaks of covid-19 lockdowns, these figures show how deliveries have become entrenched in consumers’ habits, as they now account for almost a quarter of all spending with managed groups. Our tracker also indicates that deliveries are steadily eating into the takeaway and click-and-collect sector as consumers opt for the convenience of food and drink delivered straight to their door.”